GBP/USD Forecast: hard-Brexit speculation leads ahead of May's speech

Valeria Bednarik FXStreet

The GBP/USD pair gapped lower at the weekly opening, roughly 200 pips below Friday's close, and traded as low as 1.1986 during the Asian session, before regaining the 1.2000 level early Europe. Nevertheless, the strong bearish pressure persists, and the pair is far from filling the gap, as news released over the weekend, suggest Tuesday's Theresa May speech will be lean towards a "hard-Brexit."

The logic behind the speculative headlines says that the UK should leave to EU Single Market to secure free-trade deals with other countries across the world, and regain full control of the kingdom's borders. Although its mere speculation, it was enough to take the Pound sharply lower at the opening.

After the initial decline, the GBP/USD pair is recovering some ground early London, having reached a high for the session at 1.2083. Friday's close was set at 1.2163. From a technical point of view, the 4 hours chart shows that the price remains far below a bearish 20 SMA, in the 1.2160 region, whilst technical indicators are holding near oversold readings, trying to correct higher, but with quite limited upward strength. Additionally, selling on spikes continues to be an interest trade, in spite of the gap.

The pair needs to recover above 1.2120 to advance up to the 1.2160 region, where strong selling interest will likely resurge and prevent it from advancing further. The immediate support comes at 1.2045, with a break below it indicating a slide towards 1.2000 first, and further, towards the mentioned daily low of 1.1986.

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 treads water above 1.1850 amid thin trading

EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day.

GBP/USD flat lines as traders await key UK and US macro data

GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.365 in Monday's European trading. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold sticks to intraday losses; lacks follow-through

Gold remains depressed through the early European session on Monday, though it has managed to rebound from the daily trough and currently trades around the $5,000 psychological mark. Moreover, a combination of supporting factors warrants some caution for aggressive bearish traders, and before positioning for deeper losses.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.