GBP/USD Forecast: consolidating, but scale leans towards the downside

Valeria Bednarik FXStreet

The GBP/USD pair trades within a well-limited 50 pips range above the 1.2400 level, ever since the day started, quiet after yesterday's official beginning of the Brexit. UK PM May formally notified the EU its intention to leave the Union, kick starting a two-year negotiation process on how the relationships between both will develop from now. And while the UK wants to focus on a trade-deal, the EU is centered on the UK paying the divorce bill, assuring that the UK won't get any special treatment from now on. Indeed, the split won't have immediate consequences for the Pound, but in the long run, political developments will have large influence on the currency's behavior.

There are no macroeconomic news scheduled in the UK for this Thursday, while the US will release its weekly unemployment claims report and the final revision of the Q4 GDP.

From a technical point of view, the 4 hours chart presents a neutral-to-bearish stance, with the price stuck around the 38.2% retracement of the January rally, and below a bearish 20 SMA, this last around 1.2490, whilst technical indicators head nowhere within negative territory. The pair has an immediate support at 1.2400, the daily low, followed by 1.2370. Below this last the bearish potential will increase with scope then to fall down to 1.2330. Above 1.2450, the pair could extend its gains up to the mentioned 1.2490, but further gains seem unlikely unless US data strongly disappoints.

View live chart of the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.