GBP/USD: Bulls take a breather heading into a Big Brexit Wednesday

USD profit-taking and hopes of a Brexit deal keep the Cable well bid.
All eyes on the UK Brexit Cabinet meeting and UK inflation data for a fresh directional move.

Dhwani Mehta FXStreet

The GBP/USD pair is seen flirting with the 1.30 handle, as we progress towards the European trading, having stalled the overnight bounce near 1.3035 region, as attention now turns towards the crucial UK Cabinet meeting on the Brexit deal and inflation figures.

Focus on Big Brexit Wednesday

The Cable jumped in the early trades as the US dollar ran into fresh offer versus its major rivals, with the USD index extending the retreat from 16-month tops to now trade near 97.10 levels. Broad-based US dollar weakness was mainly driven by a profit-taking spree, as the investors flocked to the GBP and the Euro on expectations that a Brexit deal will be clinched soon.

Further, the Sun newspaper reported that the UK Cabinet Ministers Raab, Hunt, Javid, Gove and Cox will support the Brexit draft likely to be presented for approval before the UK Cabinet when it meets later today at 1400 GMT.

Markets believe the UK PM Theresa May’s Cabinet may approve the draft withdrawal agreement, but it will be a challenge for May to take it through the parliament. This comes after both the UK and the European Union (EU) agreed on a preliminary Brexit text that would allow a deal that avoids a chaotic "hard Brexit" departure.

Besides, the key Brexit event, the UK October CPI figures are due on the cards and are seen a tad firmer at 2.5% y/y and 0.2% m/m. Also, of note remains the US inflation report due later in the NA session at 1330 GMT.

GBP/USD Technical Levels

GBP/USD

Overview:
    Last Price: 1.3006
    Daily change: 50 pips
    Daily change: 0.386%
    Daily Open: 1.2956
Trends:
    Daily SMA20: 1.2951
    Daily SMA50: 1.3034
    Daily SMA100: 1.3027
    Daily SMA200: 1.339
Levels:
    Daily High: 1.3048
    Daily Low: 1.2839
    Weekly High: 1.3176
    Weekly Low: 1.2958
    Monthly High: 1.326
    Monthly Low: 1.2696
    Daily Fibonacci 38.2%: 1.2968
    Daily Fibonacci 61.8%: 1.2919
    Daily Pivot Point S1: 1.2847
    Daily Pivot Point S2: 1.2738
    Daily Pivot Point S3: 1.2637
    Daily Pivot Point R1: 1.3057
    Daily Pivot Point R2: 1.3157
    Daily Pivot Point R3: 1.3266

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD clings to daily gains near 1.3350

GBP/USD holds just in positive territory around 1.3350 on Friday as the Greenback keeps a vacillating price action. With Fed rate hike expectations easing and US markets closed for the Independence Day holiday, Cable remains on track to post solid weekly gains.

EUR/USD remains sidelined around 1.1440

EUR/USD holds on to its recent gains and consolidates around 1.1440 at the end of the week as the US Dollar lacks clear direction. In the meantime, trading conditions remain subdued, with volatility constrained by the closure of US markets for the Independence Day holiday.

Gold flirts with two-week highs, targets $4,200

Gold extends its recovery for a third straight day, advancing toward the $4,200 mark per troy ounce on Friday. The precious metal looks set to snap a four-week losing streak as softer-than-expected June US NFP data prompt investors to scale back expectations of further Fed tightening.

Crypto Today: Bitcoin, Ethereum, XRP advance amid renewed capital inflows

Bitcoin maintains its upward momentum, holding above the $61,000 mark at the time of writing on Friday. Major altcoins such as Ethereum and Ripple are also posting gains, signaling a modest uptick in market sentiment and renewed risk appetite among investors.

The Iran war failed to trigger a recession. Can the US economy keep defying expectations?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.