GBP/USD: Boris to set cable's direction after last EU-UK video meeting

FXStreet Team FXStreet

GBP/USD has been extending its gains, currently sitting at 1.2586, amid an upbeat market mood. The next steps depend on UK Prime Minister Boris Johnson who has several fronts, as FXStreet’s analyst Yohay Elam notes.

Take a look to Yohay Elam’s last GBP/USD technical analysis

Key quotes

“Talks between the EU and the UK continue via video and the current round is set to end on Friday. Brussels has its hopes on a dramatic intervention by Johnson, similar to his agreement to allow a customs border between Northern Ireland and the rest of Britain. The PM will meet European Commission President von der Leyen later in June.”

“With the focus on protests in the US, China's move to grab more power in Hong Kong and protests in the city-state have faded from the headlines. However, Johnson has been raising his voice against human rights violations in the former colony. That may aggravate relations with Beijing, at a time that Britain needs more global partners following Brexit.”

“Coronavirus statistics have continued improving in the UK, but the pace remains frustratingly slow. Contrary to American leadership, UK officials expressed concern. However, the news may cause discontent, joining the anger about the PM adviser's violation of lockdown rules he helped devise. That limits the government's maneuvering space.”

“Protests against racial discrimination continued in the US, albeit with a far more peaceful tone. Stock markets shrugged off the unrest as US states continue opening. Alongside support from the Fed, investors remain optimistic and sell-off the US dollar.”

“The recovery of the world's largest economy will be tested later on Wednesday with two critical releases. ADP's private-sector Nonfarm Payrolls are set to show a loss of around nine million positions, and the ISM Non-Manufacturing Purchasing Managers' Index is estimated to have advanced in May.”

Author

FXStreet Team

FXStreet

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Bitcoin has found or is near a bottom, extended consolidation to follow: K33

Bitcoin (BTC) is nearing or has already established a bottom, which could be followed by a sustained period of slow price movement, according to K33.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.