- Doubts over the future Brexit proceedings weigh on the GBP/USD amid greenback’s safe haven demand.
- 50-day SMA can offer strong support while 1.3380 likely being crucial resistance.
GBP/USD drops to the intra-day low of 1.3176 while heading into London open on Wednesday. The Cable, as the pair is popularly known, recently dropped after markets favored the USD’s safe-haven appeal amid pessimism surrounding the global economy and the Brexit. The second-tier data from the US and the UK, coupled with Brexit proceedings at the UK parliament, will offer fresh impulse to traders.
The GBP/USD pair was initially trading flat as traders awaited directions after yesterday’s rise expectedly because of an influential Tory member of the UK parliament Jacob Rees-Mogg conveyed his support to the British PM Theresa May’s Brexit plan over twitter.
The US Dollar (USD) grabbed investor attention as the news reports started flooding rate-cut speculations for the RBA and the RBNZ while China’s industrial profits also dropped.
Traders now await UK CBI distributive realized trade survey results followed by the US January month trade balance figures from the economic calendar. While CBI may try luring the Cable buyers with 5% growth expectations against 0% earlier, likely drawdown in the US trade deficit to $-57.0 billion from $-59.8 billion could dim the upside.
On the Brexit front, House of Commons could vote over various indicative Brexit proposals after yesterday’s Letwin amendment raised prospects of the parliament taking control of the Brexit from the government. Speculations are also rising that the Theresa May’s third Brexit proposal will be voted but no clear signals are available as Tories insist majority support ahead of putting the proposal for vote thrice in nearly two months.
GBP/USD Technical Analysis
Sellers may take a break around 1.3140 ahead of highlighting 50-day simple moving average (SMA) near 1.3080. Though, 1.3000 and 200-day SMA could confine the pair’s further declines.
On the upside, 1.3240, 1.3280, 1.3310 and 1.3380 may gain buyers’ attention during the quote’s U-turn.c
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
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.