- The Brexit mood remains sour for investors, keeping the GBP/USD underbid.
- Two key reports that give insight into the UK economy's ability to survive a hard Brexit are due today, and will be drawing attention.
GBP/USD traders see their major pair struggling near 1.2740 after Tuesday's trading saw the Cable slip from the 1.2800 handle as Brexit concerns rolled over into the next chapter with little fanfare after last weekend's EU Brexit summit came to a quiet, but successful close.
The current Brexit agreement was unanimously supported by the European Union last weekend, and despite the quiet victory for UK Prime Minister Theresa May, the broader market's Brexit fears remain unassuaged, and GBP traders already have their attention pinned to the upcoming House of Commons vote on the current Brexit offer, slated for December 11th. Investors are increasingly anxious in the run-up to the UK's parliamentary vote, and market participants across the spectrum are concerned that PM May lacks the support within her own parliament to get the current Brexit deal across the finish line with hardcore Brexiteers within her own Tory party vowing to vote down the proposal, a move that would see the UK heading straight into a no-deal, hard-Brexit.
On the UK's economic docket for Wednesday is the results of the Bank of England's (BoE) Bank Stress Tests, a key test of the UK's ability to survive a messy Brexit scenario, while the BoE will also be dropping their Financial Stability Report, expected sometime in the early hours, and traders will be keeping an eye out for the unscheduled reports as they will be providing key evidence regarding the GBP's ability to weather a hard divorce from the EU.
GBP/USD Levels to watch
With Brexit tension holding steady over the Cable, bearish action remains high on the list for the GBP/USD, as noted by FXStreet's own Valeria Bednarik: "the pair remained under pressure after breaking below the 1.2800 figure, spending the last session near the mentioned low as selling interest rejecting attempts to recover ground around 1.2780. The mentioned November low stands now as a key psychological support, with a break below it exposing the yearly low at 1.2661. In the middle is October low at 1.2690. The short-term technical picture is bearish as in the 4 hours chart, the pair extended its decline below a mild-bearish 20 SMA, also developing some 300 pips below a bearish 200 EMA, as technical indicators resumed their declines within negative ground, maintaining negative slopes ahead of the Asian opening."
Support levels: 1.2720 1.2690 1.2660
Resistance levels: 1.2670 1.2815 1.2850
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
USD/JPY holds above 155.50 ahead of BoJ policy announcement
USD/JPY is trading tightly above 155.50, off multi-year highs ahead of the BoJ policy announcement. The Yen draws support from higher Japanese bond yields even as the Tokyo CPI inflation cooled more than expected.
AUD/USD extends gains toward 0.6550 after Australian PPI data
AUD/USD is extending gains toward 0.6550 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price keeps its range around $2,330, awaits US PCE data
Gold price is consolidating Thursday's rebound early Friday. Gold price jumped after US GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the Fed could lower borrowing costs. Focus shifts to US PCE inflation on Friday.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.