- Sterling bidders remain in control heading into the London market session, fueled by Brexit hope.
- A UK GDP reading is slated for the London morning, and contracting growth numbers bode poorly for buyers.
The GBP/USD is grinding its way higher for Wednesday, clearing 1.3150 in early trading as bullish-hopefuls continue to cling to headlines that suggest that Brexit may not turn into the flaming mess many investors are fearing.
News headlines continue to cross that all hope is not lost in the ongoing Brexit saga, and this week is seeing a revival in the bulls' camp as the UK and the European Union look set to try and strong-arm their way into an interim deal ahead of a fast-approaching November deadline, and risk-hungry investors are jumping on the GBP train in anticipation of some forward momentum on talks. The two sides remain far apart on the still-unresolved Irish border dispute, as well as how far and for how long the UK will remain embroiled in the European customs union following Brexit, and the Eurosceptic Brexiteers within UK Prime Minister Theresa May's own party still remain a viable threat, still promising to vote down any Chequers-based deal that PM May might squeeze out of the EU.
Wednesday also delivers a fresh round of the UK's monthly GDP reading at 08:30 GMT, with the headline figure forecast to clock in at 0.1%, a slight contraction from the previous month's 0.3%, and a missed reading here could see bulls having a harder fight than they anticipated as Britain's economy still struggles to throw off signs of stagnating growth within their domestic economy.
GBP/USD levels to watch
Despite obvious sell-side risks present for the Cable heading into the latter half of the week, the GBP/USD pairing remains well-bid for the early half of Wednesday, and as FXStreet's own Valeria Bednarik notes, "meanwhile, the 4 hours chart for the pair shows that it found support around a flat 200 EMA, now developing also above a bullish 20 SMA, while technical indicators bounced from their mid-lines, holding below previous monthly highs despite the price reached a fresh one. The pair is still developing below the 50% retracement of the 2016/18 rally at 1.3170, a major static resistance level that needs to be cleared for a more sustainable recovery ahead. Seems unlikely, however, that the pair could begin a clear directional move with a Brexit deal still pending."
Support levels: 1.3040 1.3000 1.2970
Resistance levels: 1.3100 1.3130 1.3175
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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold climbs above $2,340 following earlier drop
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.