GBP/USD Forecast: Corbyn cuts cable's climb, downtrend resistance works


  • GBP/USD falls after talks between the government and the opposition stalled.
  • The move comes despite upbeat data and a positive market mood.
  • Downtrend resistance proved its strength.

GBP/USD is down to around 1.3050, hitting the lowest levels in a week. Labour leader Jeremy Corbyn said that there is no agreement on a customs union between the government and the opposition. He said that the government is not shifting on its red lines and blames hardliners in the Conservative Party for wanting a deregulated low-tax society that will deal with Trump.

The news sent the pound down despite upbeat data. UK unemployment remains at a record low of 3.9%, and wage growth holds its ground at 3.5% YoY. In addition, stock markets are positive, and the risk-on mood should have helped Sterling surpass the US Dollar. Nevertheless, Brexit dominates, even after the long delay.

Further responses to the stalled talks will likely dominate the next moves.

GBP/USD Technical Analysis

Downtrend resistance works. Once again, GBP/USD could not break higher. The failure opens the door to lower ground. The Relative Strength Index on the four-hour chart also turned lower and the pair lost the 50 Simple Moving Average. 

Below 1.3050, cable has support at 1.3030 which was a low point last week. 1.2985 was the trough in April and 1.2960 was the low point in March.

Resistance awaits at this week's highs at 1.3120, followed by the April high of 1.3200. 1.3270 and 1.3315 are next.

Another top-tier economic indicator awaits the pound on Wednesday. 

See UK inflation preview: Can a second positive piece of data lift GBP/USD?

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

Latest Forex Analysis

Editors’ Picks

AUD/USD: Nears six-week low of 0.6835 on the break of 100-day SMA

AUD/USD extends its four-day-old declines while flashing fresh six-week low of 0.6835 during early Wednesday. The pair registered its first daily closing below 100-day SMA since early December on Tuesday.

AUD/USD News

USD/JPY drops to weekly low near 109.80 as fears of SARS return remain in focus

USD/JPY extends the previous day’s losses to 109.80, the weakest since January 07, while entering the Asian session on Wednesday. The pair registered heavy losses on Tuesday as news of China’s virus outbreaks gone viral.

USD/JPY News

Coronavirus FX Selloff, CAD Prime for Bank of Canada Breakout?

The most influential story for the financial markets today was reports that the first US case of corona virus has been confirmed. This deadly virus is spreading across the globe creating concerns about the impact on travel and consumer spending.

Read more

Gold: Stays below $1,560 following Tuesday’s bearish spinning top

Gold remains on the back foot while trading around $1,556.90 during the Asian session on Wednesday. The yellow metal portrayed a bearish candlestick formation, backed by bearish MACD, during the previous day.

Gold News

GBP/USD: Aims to revisit 200-hour SMA, immediate support trendline

GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fib retracement of its fall from Jan 07 to 14. A two-week-old falling trend line adds to the resistance.

GBP/USD News

Forex Majors

Cryptocurrencies

Signatures