Mario Blascak, PhD
Independent Analyst
- The GBP/USD is boosted to mid 1.2900s on delayed Brexit hopes.
- The Bank of England Deputy Governor Ben Broadbent is scheduled to speak at the London School for economics.
- The political disputes about the future continue with the opposition Labor party pushing for the second referendum.
Looks like Brexit optimism is settling on Sterling market with the stop moving higher into the middle of the 1.2900-1.3000 range on Wednesday ahead of the Bank of England Deputy Governor Ben Broadbent speaking at London School of Economics. Investors are taking the advantage of the political chaos in the hope for Brexit delay.
The reason for markets to cheer Sterling is in the UK political development with the UK opposition Labor party hoping for a second referendum triggering a legislative move to avoid a no-deal Brexit scenario by supporting the idea of postponing the Brexit data from March 29 this year.
In the interview for BBC, the Labor party chief finance spokesman John McDonnell said that postponing Brexit is a way to avoid disasterous no-deal outcome.
Although economic consequences of delaying Brexit are negative as postponement is expected to weigh further on business investment and growth, the short-term foreign exchange market reaction is Sterling positive as the slide lower looks largely exhausted.
While Bank of England Deputy Governor Broadbent will speak today, the message for the markets will be expectedly clear voicing Brexit uncertainty as a major source of the economic slowdown.
The technical picture for Sterling point to GBP/USD being elevated in a sideways trend after breaking away from the downward sloping trend. The post-Brexit slump correction saw GBP/USD rise from 1.1800 to 1.4377 level and the GBP/USD is now trading just below 38.2% Fibonacci retracement of the upmove from 1.2130 to 1.4177 level at 1.2990.
The technical oscillators including the Relative Strength Index and Slow Stochastics are both elevated with Slow Stochastics making the bearish crossover in the Overbought territory. The GBP/USD is facing a tough resistance at Fibonacci retracement at 1.2990 and failure on the upside is set to see GBP/USD testing 1.2900 before moving back to 1.2800-1.2900 range.
GBP/USD daily chart
-636838295733387649.png)
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold price lacks firm intraday direction, holds steady above $2,300 ahead of US data
Gold price remains confined in a narrow band for the second straight day on Thursday. Reduced Fed rate cut bets and a positive risk tone cap the upside for the commodity. Traders now await key US macro data before positioning for the near-term trajectory.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. Coupled with broader market gloom, INJ token’s doomed days may not be over yet.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter gross domestic product (GDP) data on Thursday.