Sterling entered the trading week firmly gripped by caution as investors brace for a vote tomorrow on British Prime Minister May’s Brexit deal.

Although market expectations remain elevated over May’s Brexit deal facing rejection by Members of Parliament, there will be a stronger focus on what happens after the “meaningful vote”. Will the government’s defeat on May’s deal result in Labour triggering a no-confidence vote? Will Theresa May rush back to Brussels to plead for further concessions from the EU? Amid the chaos and uncertainty, could the UK government be forced to extend Article 50 beyond the planned exit date? Are we going to witness a snap general election or even a second Brexit referendum? While the outcome of tomorrow’s Brexit vote remains open to question, it will certainly leave a lasting mark on the British Pound.

Theresa May is scheduled to make a statement to Parliament this afternoon in a bid to gather more support for her deal. Her speech runs of the risk of falling on deaf ears if nothing new is brought to the table.

Sterling’s outlook remains mired by endless uncertainty surrounding Brexit and ongoing political drama in the House of Commons. The volatile price action witnessed in recent days continues to highlight how the currency remains influenced by Brexit headlines. In regards to the technical perspective, the GBPUSD secured a weekly close above 1.2820, mostly due to Brexit noise. The 1.2820 level is seen acting as support that pushes prices towards 1.2920. Although the technicals are pointing to further upside in the near term, investors should keep in mind that the Pound’s fate hangs on what happens after the Brexit “meaningful vote” on Tuesday.

GBPUSD

Are Dollar bulls running out of steam?

The Greenback weakened against a basket of major currencies this afternoon as a political impasse in Washington and expectations over the Fed taking a pause on rate hikes reduced investor attraction for the currency

Dollar Index bulls have been missing in action in recent weeks with the breakdown below 96.00 suggesting that bears are back in the driver’s seat. Appetite towards the Dollar is seen diminishing further if disappointing economic data threatens itssafe-haven status. With the economic calendar in the United States void of Tier 1 economic reports today, the Dollar is poised to be driven by price action. Technical traders will continue observing how prices behave below 96.00. Sustained weakness under this level could open a path back towards 95.00 and 94.20, respectively.

Commodity spotlight – Gold

Gold not only remains supported by geopolitical risks but expectations over the Fed taking a break on rate hikes this year.

The yellow metal continues to shine brightly amid the uncertainty with weakness in both global equity markets and the Dollar fueling upside gains. Taking a look at the technical picture, Gold remains firmly bullish on the daily charts as there have been consistently higher highs and higher lows. A solid breakout and daily close above the psychological $1,300 level is seen opening a clean path towards $1,308 and $1,324.

Disclaimer:This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Recommended Content


Recommended Content

Editors’ Picks

GBP/USD resumes upside toward 1.3300 ahead of BoE rate call

GBP/USD resumes upside toward 1.3300 ahead of BoE rate call

The GBP/USD gains traction and approaches 1.3300 in European trading on Thursday, having found buyers near 1.3150. A broad US Dollar pullback and a rebound in risk sentiment offer support to the pair ahead of the BoE policy announcements. 

GBP/USD News
EUR/USD rises further toward 1.1200, focus shifts to ECB-speak

EUR/USD rises further toward 1.1200, focus shifts to ECB-speak

EUR/USD stays strongly bid toward 1.1200 in the European session on Thursday. The pair capitalizes on a renewed US Dollar retreat and an upbeat mood. Traders digest the Fed's dovish outlook, bracing for ECB-speak for fresh trading incentives. US data are also eyed. 

EUR/USD News
Gold hovers close to new high of $2,600 after Fed meeting

Gold hovers close to new high of $2,600 after Fed meeting

Gold (XAU/USD) edges higher and trades back in the $2,580s on Thursday after falling to the $2,540s following the US Federal Reserve (Fed) decision on interest rates the prior day.

Gold News
BoE expected to keep interest rate unchanged at 5% as price pressures persist

BoE expected to keep interest rate unchanged at 5% as price pressures persist

After a close call in August, the Bank of England’s September interest rate decision is keenly awaited for fresh cues on the bank’s future policy action and the pace of its bond sales.

Read more
Bitcoin surges to $62,000 mark after 50 bps Fed rate cut

Bitcoin surges to $62,000 mark after 50 bps Fed rate cut

Bitcoin and Ripple eye for a rally as they break and find support around their resistance barrier. Meanwhile, Ethereum demonstrates signs of recovery as it approaches a critical resistance level, indicating that an upward rally could be on the horizon if it successfully breaks through.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures