GBP/USD Current price: 1.2595

  • Boris Johnson is likely to become the next UK PM.
  • BOE's Governor Carney reiterated that gradual rate hikes are on the table.

The GBP/USD pair spent the week trying to extend gains beyond the 1.2700 mark but finally collapsed Friday, to settle below the 1.2600 level for the first time this year. The dollar's broad strength was partially responsible for the decline, but also the noise coming from Tories related to PM May's succession as Tory leader. On Thursday, Conservative MPs had their first ballot, with Boris Johnson being the overall winner. Johnson has stated this past week that he will take the kingdom out of the EU by October 31, with or without a deal. He later poured some cold water on his comments, yet the damage was done. Meanwhile, the EU believes that Johnson won't risk a no-deal Brexit but rather ask for another extension. EU politicians keep repeating that the withdrawal deal is not open to renegotiating.

On Friday, BOE's Governor Carney delivered the central bank's annual report and said that the upward pressure on prices is likely to build if the economy performs as the MPC expects, which means that policymakers will hike, although he repeated that it would happen at a gradual pace and to a limited extent. This Monday, the UK macroeconomic calendar will include the May Rightmove House Price Index and the Inflation Hearings report.

The daily chart for the GBP/USD pair shows that it collapsed Friday after spending the week around a firmly bearish 20 SMA, while technical indicators turned sharply lower, the Momentum barely entering negative ground and the RSI currently at 34, this last reflecting the strength of sellers. Shorter term, and according to the 4 hours chart, the bearish case is also favored, as the pair is currently developing below all of its moving averages, with the 20 SMA about to cross below the 10 SMA, both in the 1.2670/80 price zone, while technical indicators stalled their declines, but were unable to bounce, now consolidating in oversold territory. May's monthly low at 1.2558 is now the immediate support, with a break below it likely resulting in a steeper slide.

Support levels: 1.2555 1.2510 1.2475

Resistance levels: 1.2630 1.2670 1.2705

View Live Chart for the GBP/USD

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD hovers around 1.1130 in dull session, ECB eyed

The EUR/USD pair has recovered from a fresh weekly low of 1.1105 but remains depressed. Market players now waiting for ECB’s monetary policy, the last one presided by Mario Draghi.

EUR/USD News

GBP/USD attempting to recover after parliament slowed down the Brexit process

GBP/USD is moving up toward 1.29, trying to recover after parliament rejected the fast-track process that PM Johnson wanted for approving his Brexit deal. An extension to Article 50 and elections are on the cards.

GBP/USD News

USD/JPY struggles below mid-108.00s, over one-week lows

The Greenback held weaker against its Japanese counterpart, with the USD/JPY pair struggling below mid-108.00s, or over one-week lows set earlier this Wednesday.

USD/JPY News

If you are a "Hodler" here is where you could find support in Bitcoin

Today the price of Bitcoin fell and the price is now headed toward the 7,310.00 support used as a resistance zone on the week of the 3rd September 2018.

Read more

Gold climbs higher toward $1,500 on risk-aversion

The XAU/USD pair gained traction on Wednesday and rose toward the upper-limit of its two-week-old range near the critical $1,500 handle supported by risk-off flows.

Gold News

Forex Majors

Cryptocurrencies

Signatures