GBP/USD Outlook: Sterling cracked key supports after UK lawmakers rejected Brexit plan again

Slobodan Drvenica Windsor Brokers

GBPUSD

Cable collapsed below 1.30 on Friday and cracked key supports (200SMA/bull-channel support trendline and also pressured the top of thick daily cloud) after UK parliament rejected PM May's deal for the third time. Lawmakers voted 344 against vs 286 for the deal, confirming their previous decisions that the plan is not good enough. Cable moved in a roller-coaster on Friday, as optimistic news boosted pound for over 100-pips advance, but rally quickly changed direction after initial optimism started to fade and accelerated to new low on May's repeated defeat. According to the already known information, the Britain will leave the EU on 12 April, however, the government is expected work on alternative scenarios and possibly bring plan B that will need consensus at home and then to persuade EU members to approve longer extension. UK government will try to buy some time to find workable solution in order to avoid disastrous 12 April no-deal Brexit scenario. Today's attack at 200SMA could generate strong bearish signal on weekly close below, as the moving average kept the downside protected since 19 Feb. Sterling could spiral lower on sustained break as this will also signal break out of bull-channel (uptrend from 2018 low at 1.2476) that would imply the change of the trend. Soured sentiment of Rejection of Brexit plan would add to negative outlook.

Res: 1.3070; 1.3135; 1.3153; 1.3162
Sup: 1.2980; 1.2968; 1.2960; 1.2923

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.3346
2. R2 1.3281
3. R1 1.3164
PP 1.31
1. S1 1.2983
2. S2 1.2918
3. S3 1.2801

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.

GBP/USD grinds higher to 1.3650 as USD recovery falters

GBP/USD grinds higher to near 1.3650 in Tuesday's European session. The US Dollar recovery falters, despite US sanctions on Iran, as hopes for diplomatic efforts creep back amid reports that Pakistan is carrying an offer to Iran to halt the siege and lift sanctions under the Memorandum of Understanding.

EUR/USD recovers toward 1.1700 as USD loses traction

EUR/USD is recovering ground toward 1.1700 in European trading on Tuesday. The pair draws support as the US Dollar rebound loses traction amid fresh diplomacy hopes in the Middle East conflict. An upbeat German IFO Survey also aids Euro bulls.

Gold remains depressed below $4,650 on firmer USD, Fed risks, and Middle East tensions

Gold remains on the back foot below $4,650 through the first half of the European session. However, the lack of follow-through selling warrants caution before positioning for an extension of the intraday retracement slide from the $4,700 neighborhood, or the highest level since May 14, touched earlier this Tuesday. The US Dollar is seen building on its recovery from a three-month low as inflation risks stemming from volatile energy prices keep bets for at least one interest rate hike by the US Federal Reserve on the table.

Bitcoin's rally above $80,000 shows signs of overheating

Bitcoin extends gains, trading above $80,000 at the time of writing on Tuesday following its strongest weekly rise in more than three years. Institutional demand continues to support this rally, with spot Exchange Traded Funds recording positive inflows on Monday.

Iran and Fed outlook remain uncertain after Bessent’s comments and ahead of Jackson Hole

Asia Market Update: Directionless trading continues for a 2nd straight session; Iran and Fed outlook remain uncertain after Bessent’s comments and ahead of Jackson Hole; Oman’s Foreign Minister will visit Tehran to Tues, Pakistan commented on MOU.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.