GBP/USD in search of a firm direction; stuck in a familiar trading range


  • The British Pound remains on the defensive amid persistent Brexit uncertainties.
  • Fed rate cut speculations weighed on the USD and helped limit the downside.

The GBP/USD pair extended its sideways consolidative price action through the Asian session on Monday and remained well within a broader trading range held over the past one week or so.
 
A combination of diverging factors failed to provide any meaningful impetus to the major and led to subdued trading at the start of a new week. The British Pound remained on the defensive in the wake of Friday's report that the European parliament president has rejected the UK PM Boris Johnson's new Brexit proposal.

Weaker USD lend support, Brexit uncertainties cap gains

The downside, however, remained cushioned, at least for the time being, amid a mildly weaker tone surrounding the US Dollar, weighed down by firming market expectations that the Fed will cut interest rates again at its upcoming monetary policy meeting on October 29-30 in order to support the economy.
 
A string of soft US economic data last week raised doubts on the assumption that the US economy will be more resilient than other economies and forced investors to start pricing in further monetary easing by the Fed. The same was evident from the recent slump in the US Treasury bond yields, which undermined the USD demand.
 
However, the fact that the UK PM Boris Johnson remains firm to take Britain out of the European Union on October 31, with or without a deal, held investors from placing any aggressive bullish bet and might keep a lid on any attempted positive move for the major amid absent relevant market moving economic releases.
 
In the latest Brexit-related development, The Telegraph reported that Boris Johnson would veto the EU’s seven-year budget and send a Eurosceptic commissioner to Brussels to “disrupt” the bloc’s workings if he were forced into a Brexit delay. Senior Government figures are considering a series of proposals to “sabotage” the EU’s structures if Brussels refuses to agree with a new deal or let Mr Johnson deliver Brexit without one.
 
Meanwhile, Johnson has urged French President Emanuel Macron on Sunday to "push forward" to secure a Brexit deal and told him that Britain will leave the European Union without a deal on Oct. 31 if the European Union (EU) does not show a willingness to compromise.
 
Hence, it will be prudent to wait for a sustained breakthrough the recent trading range before traders start positioning for the pair's next leg of a directional move. In the meantime, a scheduled speech the Fed Chair Jerome Powell will now be eyed for some short-term trading impetus later during the US session on Monday.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2323
Today Daily Change -0.0011
Today Daily Change % -0.09
Today daily open 1.2334
 
Trends
Daily SMA20 1.2385
Daily SMA50 1.2252
Daily SMA100 1.2429
Daily SMA200 1.2723
 
Levels
Previous Daily High 1.2357
Previous Daily Low 1.2276
Previous Weekly High 1.2414
Previous Weekly Low 1.2205
Previous Monthly High 1.2583
Previous Monthly Low 1.1958
Daily Fibonacci 38.2% 1.2326
Daily Fibonacci 61.8% 1.2307
Daily Pivot Point S1 1.2288
Daily Pivot Point S2 1.2241
Daily Pivot Point S3 1.2207
Daily Pivot Point R1 1.2369
Daily Pivot Point R2 1.2403
Daily Pivot Point R3 1.245

 

 

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD advances above 1.14 after unchanged ECB, mixed US data

EUR/USD is trading above 1.14, higher after the ECB left policy unchanged and called governments to act. US retail sales beat with 7.5% while jobless claims disappointed with 1.3 million. US coronavirus figures are showing further increases in cases.

EUR/USD News

GBP/USD advances above 1.26 amid mostly upbeat US, UK data

GBP/USD is trading above 1.26, higher. The UK jobs reports showed low unemployment but also depressed wages. US retail sales beat expectations but jobless claims remain high. 

GBP/USD News

Gold trades with modest losses, downside remains limited

Gold witnessed a modest intraday pullback amid a pickup in the USD demand. The prevalent risk-off mood extended some support to the safe-haven metal. A sustained break below $1800 is needed to confirm a bearish break.

Gold News

Why is the crypto market falling today?

War for dominance impacts the market and heralds several days of turbulence. Fight between Bitcoin and Ethereum hurts the Altcoin segment, which is largely overbought after weeks of euphoria. Ripple is the most affected of the Top 3 and steps back into a high-risk environment.

Read more

WTI: 200-HMA is a tough nut to crack amid rising wedge breakdown

WTI has bounced-off lows, still sheds over 1% to trade around $40.80, as the OPEC and its allies’ (OPEC+) decision to ease output cuts from next month weighs.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures