- The GBP/USD slipped lower on Wednesday ahead of the European Council meeting on Brexit.
- The UK headline inflation decelerated more than forecast in September.
- Irish Foreign Minister Coveney said that “people should not panic if no deal this week” readying markets for the Brexit summit outcome.
The GBP/USD is trading on the downside at around 1.3140 after the UK inflation data failed to meet the market expectations with headline inflation decelerating to 2.8% y/y in September while core inflation decelerated to 1.9% y/y. The market focus turns to Brexit summit scheduled for the Wednesday evening as the leaders of the European Union will dine with the UK Prime Minister Theresa May over the outcome of ongoing intensive negotiations.
Judging from the public statements of various European Union officials, it is clear that the Brexit summit today will not deliver the final agreement. The Irish Foreign Minister Simon Coveney said that “people should not panic if no deal this week” getting the markets for the Brexit summit outcome.
In the run-up to the Brexit summit, the European Council President Donald Tusk said that no deal is more likely than ever before.
Although Sterling has been resilient so far to the Brexit summit gossip so far, the actual no deal outcome is set to trigger a pullback on GBP/USD.
Technically, the GBP/USD closed to gap on the downside after opening at 1.3085 on Monday abut broke away from parallel upward sloping trendline on a build-up of the Brexit summit related uncertainty and the UK inflation data miss.
The technical oscillators are pointing downwards on the 1-hour chart and further potential lays on the downside. The GBP/USD needs to break the confluence resistance of 1.3103 representing a 100-day moving average and the 38.2% Fibonacci retracement of a move from 1.4377 to 1.2662 to move lower targeting 1.3030 and 1.2970 further down. On the upside the GBP/USD the immediate target is 1.3230-1.3250 last week’s high.
GBP/USD 1-hour chart
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 stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.