GBP/USD Forecast: Progress in Brexit talks could push it beyond 1.3000

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2978

The UK and the EU kick-started two weeks of intense talks about a trade deal.
UK economic progress continued in September, according to Markit.
GBP/USD is holding on to gains near the critical 1.30 threshold.

The GBP/USD pair traded as high as 1.2991, underpinned by the ruling upbeat mood. The pair not only found support in rallying equities but also in mounting hopes for a breakthrough in Brexit talks. Despite the EU and the UK remaining far apart in some critical issues, UK PM Johnson and EU Commission leader, Ursula von der Leyen had agreed to extend negotiations until October 31, a sign that none of them favors a no-deal exit. Two weeks of intense talks began this Monday.

Earlier in the day, Markit published the final version of the UK Markit Services PMI, which resulted in September at 56.1, better than the previous 55. On Tuesday, Markit will publish the UK September Construction PMI foreseen at 54.1 from 54.6 previously.

GBP/USD short-term technical outlook

The GBP/USD pair holds on to daily gains ahead of the Asian opening trading in the 1.2970 price zone. The 4-hour chart shows that the Momentum indicator eased, but that the RSI indicator holds steady around 61, reflecting the latest range rather than suggesting an upcoming decline. In the mentioned chart, a bullish 20 SMA provided intraday support, currently in the 1.2920 price zone.

Support levels: 1.2925 1.2870 1.2815

Resistance levels: 1.3010 1.3050 1.3085

View Live Chart for 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.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.