GBP/USD Forecast: Becoming immune to Brexit headlines?

The GBP/USD is ticking up in range, rising on USD weakness.
German Chancellor Merkel joins the chorus about Brexit.
The technical picture is not that great for the pair.

Yohay Elam FXStreet

The GBP/USD is trading at 1.3150, slightly higher on the day. The US Dollar is losing some ground after strengthening earlier. Brexit headlines continue to come at a rapid clip, but the Pound may have become immune to them.

German Chancellor Angela Merkl said that an agreement about Brexit could come in October, but also commented that "it is not clear what Britain wants." This comment is consistent with the disparaging remarks by other European officials. Last week's Salzburg Summit ended with the EU rejecting Britain's Chequers proposal.

The opposition Labour Party is holding its annual conference and could agree to support a second EU Referendum. They are also likely to decide on opposing any deal that May reaches with the EU.

Bank of England member Gertjan Vlieghe said that more communication would be needed as QE is unwound. The BOE seems from far reducing its balance sheet as it awaits Brexit.

In the US, tensions with China over trade continue, with the world's second-largest economy saying it refuses to negotiate under threats. The Conference Board consumer confidence measure is due later on and is forecast to slide from the highest levels since November 2000.

The most significant event of the week is the rate decision of the Federal Reserve. The US central bank is projected to raise rates now and signal another increase in December. Future monetary policy remains a mystery.

See: Fed Preview: Tight or not so tight? Dollar Domination awaits

GBP/USD Technical Analysis

The GBP/USD is battling the 50 Simple Moving Average on the four-hour chart after losing it yesterday. It still trades above the 200 one, but Momentum remains negative. The Relative Strength Index is quite neutral.

1.3180 capped the pair late last week. Further resistance awaits at 1.3225 which supported the GBP/USD when it temporarily traded at the high ground last week. The peak of 1.3300 is next in line.

1.3100 provided support early in the day and was also a swing low last week. 1.3050 was the low point on Friday and also a stepping stone on the way up. Lower, we see 1.2970 after it worked as a line of support in mid-September.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.