GBP/USD Forecast: USD weakness outweighs Brexit concerns, resistance at risk

The GBP/USD is moving higher, enjoying USD weakness.
France is preparing contingency plans for a no-deal Brexit.
The pair is trading in a narrowing wedge, attempting an upside break.

Yohay Elam FXStreet

The GBP/USD is trading around 1.2900, slightly higher on the day. The US Dollar resumes its falls following the US-Mexico deal. The breakthrough in negotiations triggered a positive, risk-on, mood in markets which weighs on the US Dollar.

The British Pound took advantage of it on Monday during the UK bank holiday and again today when Brits are back to work.

Brexit negotiations continue, and the message from London remains the same: optimism for a deal but preparations for the worst. Across the Channel, France has stepped up its preparations for a no-deal Brexit. It is reportedly set to complete a plan in the next few weeks. In the recent past, any contingency planning for a no-deal Brexit weighed on the pound.

UK International Trade Secretary Liam Fox said that the UK made a reasonable and fair offer to the EU. His words do not seem to promote a compromise.

Second tier US data is due later in the day: the Case Shiller House Price Index and the Conference Board's Consumer Confidence stand out.

The tweets and deeds of President Tump and any developments or lack thereof in the Brexit negotiations will move the pair. Economic data play second fiddle, at least today.

GBP/USD Technical Analysis

The GBP/USD is trading in a narrowing wedge or triangle. Uptrend support began at the 1.2662 level, the 2018 low. Downtrend resistance dates back to last week. The pair is challenging the top.

Other indicators are more balanced, with no clear momentum and the Relative Strength Index is only slightly above balanced levels. The GBP/USD is trading between the 40 and 200 Simple Moving Averages.

1.2940 capped the pair last week. Further above, 1.3000 is a round number and also had a role as support earlier in the year. 1.3045 held cable down in early August. 1.3080 served as support in July.

1.2840 provided support lately. It is followed by the round level of 1.2800 seen in mid-August. 1.2740 capped the pair earlier in the month.

Brexit: Talking is good, timing is bad, and agreeing can be ugly

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.