- Brexit pessimism weighs on GBP/USD as Mueller report, US-China trade talk favor the greenback buyers.
- Fed policymakers’ comments would be checked to confirm the recent bearish bias at the US central bank.
The British Pound (GBP) was trading around 1.3200 versus the US Dollar (USD) ahead of London open on Monday. The GBP/USD pair has been volatile off-late as developments surrounding Brexit confront mixed news out of the US. Lack of data/event highlights the importance of the Fed members’ speeches and second-tier US data, coupled with mounting Brexit anxiety, as near-term catalysts.
Friday’s news that the EU is ready to extend the Brexit deadline off from March 29 pleased the GBP buyers initially but doubts over the PM Theresa May’s future leadership confine the Cable’s gain. Though, Bloomberg reports claiming that Chancellor of the Exchequer Philip Hammond and other cabinet colleagues publicly supported PM May eased some of the pessimism.
PM May will put forward her Brexit proposal third time in the UK parliament on Tuesday in order to gain support and avail deadline extension till May 22. If Mrs. May witnesses another humiliation from the members of the parliament (MPs) Brexit will take place on April 12.
On the other hand, the US Dollar was also struggling amid weaker US fundamentals that led the first spread inversion since 2007 between the 3-month Treasury bills and the 10-year note yields.
Recently, the news that the special counsel Robert Mueller failed to find any strong pieces of evidence that support the claims that Trump’s campaign team and Russia colluded during the 2016 Presidential election. Following that news of the US-China trade negotiations to take place on March 28 in China and on April 03 in the US pleased global trade watchers.
Looking forward, in addition to the British PM May’s struggle to win over parliament support for her Brexit deals, comments from the Presidents of the Federal Reserve Bank of Chicago and Philadelphia, namely Charles Evans and Patrick Harker, will be observed closely in light of recently dovish Fed meeting outcome. Also, the February month release of the US Chicago Fed National Activity Index can gain investors’ attention as well. The activity gauge dropped negative to -0.43 during January.
GBP/USD Technical Analysis
While 50-day simple moving average (SMA) and an ascending support-line since January limit the pair’s declines around 1.3070, the 200-day SMA at 1.2980 also become important support to watch during the quote’s south-run.
Alternatively, 1.3245 and 1.3300 can please buyers ahead of challenging them with 1.3380 and 1.3410 resistance levels.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.