GBP/USD Outlook: Recovery stalls on political turmoil and Brexit fears

Slobodan Drvenica Windsor Brokers

GBPUSD

Recovery from new multi-month low at 1.2605 is running out of steam as attempts to extend higher, stalled at 1.2947 in early Asian trading on Monday, unable to break above Fibo 23.6% of 1.3179/1.2605/falling 10 SMA (1.2940/41). Bulls are losing traction despite formation of Doji reversal pattern on daily chart as overall outlook remains negative over no-deal Brexit fears and political turmoil in the UK. Daily studies are in bearish mode and current action was seen as positioning for fresh weakness, however, extended consolidation above 1.2600 zone, which proves to be solid support, may extend. Victory of Brexit party in the EU election and defeat of main Conservative and Labor parties shows that the UK is strongly divided over Brexit. Resignation of PM May and battle of candidates for the leadership, adds to political uncertainty that weighs on starling and may limit recovery. Near-term outlook is expected to remain negative while falling 10SMA caps, with extension and close below 5SMA (1.2685) to risk retest of 1.26 zone. Only close above 10SMA would keep in play hopes for further recovery and possible test of next pivotal barrier at 1.2824 (Fibo 38.2% of 1.3179/1.2605).

Res: 1.2740; 1.2763; 1.2810; 1.2824
Sup: 1.2685; 1.2647; 1.2605; 1.2580

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.2834
2. R2 1.2783
3. R1 1.2747
PP 1.2697
1. S1 1.2661
2. S2 1.2611
3. S3 1.2574

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Breaking: US and Israel attack Iran, risk aversion to sweep global markets

Early Saturday, United States (US) President Donald Trump announced that the US had begun “major combat operations” in Iran, following Israel’s pre-emptive missile attacks against Tehran.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.