GBP/USD Forecast: Sterling could gap higher on reports of an upcoming Brexit deal - levels to watch

  • The Sunday Times reports that preparations for a deal are far more advanced.
  • Despite denials, expectations are rising toward a cabinet meeting on Tuesday.
  • The GBP/USD could kick off the week with a weekend gap.

Following up on previous reports of progress in talks, the Sunday Times reported that preparations for a deal "are far more advanced than previously disclosed. The London-based paper says that the UK has received concessions from the European Union that will enable the whole of Britain to remain in the customs union. 

Prime Minister Theresa May will convene her cabinet on Tuesday, as usual. However, the ministers were not given the agenda of the meeting. The secrecy raises the option that a Brexit deal is in the works. Downing Street has labeled the suggestions made by the Times as "speculation" but has not denied them outright. 

The GBP/USD closed the week below 1.3000, but significantly higher than the trough of 1.2968 seen earlier in the week. Hopes for a Brexit accord drove the pair higher, but these were focused on another report for a post-Brexit arrangement only for the financial services sector and some positive commentary from Brexit Secretary Dominic Raab.

The fresh Sunday Times report suggests that both sides are getting closer and that an EU Summit may be called for the week of November 12-16. 

GBP/USD - Sunday Gap?

GBP USD Sunday gap possible November 4 5 2018

The optimism could send the GBP/USD higher as a new trading week begins. The 1.3040 was the high point on Friday before cable dropped back down. 1.3080 was a swing low in mid-October and also served as support in July. 

1.3240 was a swing high in mid-October and 1.3300 was the peak in September and the is also a round number. Higher above, we are back to levels last seen in July, such as 1.3360. 

On the downside, 1.2925 was the low point in early October. It is followed by 1.2850 that capped the pair before the recent upswing and also provided support in late August. 1.2700 was the trough last week.

More: GBP/USD: Downside trend break sets the stage for 1.3060-1.3100

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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: bears pressuring, 1.0980 critical support

Risk aversion took over the FX board on Friday, weighing on high-yielding assets. The EUR/USD pair, finished the week just a handful of pips above the 1.1000 figure amid mounting tensions between the US and China.


GBP/USD: at risk of losing more ground in the short-term

The GBP/USD pair advanced up to 1.2581, it highest in over two months, but was unable to sustain gains, ending the week around 1.2470. Cable could keep losing ground on a break below 1.2460, the immediate support.


USD/JPY: at a bring of breaking lower

Fresh risk-off flows resulted in the USD/JPY pair trimming weekly gains on Friday, ending the week at 107.55. The pair barely holding above a critical Fibonacci support at 107.45. Japan’s National inflation steady at lows in August.


Top 3 price prediction Bitcoin, Ripple, Ethereum: Ethereum points to the Moon as Bitcoin takes a break

ETH/USD exceeds $220 and is bidding to lead the market. Bitcoin sets a bear trap and recaptures $10,000. XRP stalls between technical levels and fails to consolidate $0.30.

Read more

Gold climbs further beyond $1500 mark, lacks follow-through

Gold edged higher for the second consecutive session on Friday, albeit remained well within a familiar trading range held over the past two weeks or so.

Gold News

Forex Majors