GBP/USD is approaching two-month rising trendline on Brexit impasse

GBP/USD is closing on trendline connecting the Aug. 15 low and Oct. 4 low. A close below that would embolden the bears.
The Brexit impasse is hurting the British Pound. The UK Prime Minister May will likely have a tough time selling an extension to the Brexit transition period at home.

Omkar Godbole FXStreet Contributor

The GBP/USD pair fell to 1.3015 and could further to key trendline support today on the Brexit impasse.

At press time, the currency pair is trading at 1.3021 and the support of the trendline connecting the Aug. 15 low and Oct. 4 low is located at 1.30. Interestingly, 1.30 is also the 76.4 percent Fib retracement level of the rally from 1.2921/1.3258.

UK's Theresa May signaled yesterday that she would consider extending the transition to allow more time for UK and EU negotiators to solve problems around key issues like the Irish border. Further, the European Commission's Jean-Claude Juncker said that any request for an extension to the Brexit transition period by the UK would be considered "positively" and likely be accepted.

Still, the Pound struggled to pick up a bid in Asia as markets believe that Theresa May will have a hard time selling the extension at home. Moreover, as Reuters report says, May's strategy is being criticized by both sides - Brexit supporters accuse her of making Britain a vassal state while the EU supporters say the offer is the worst of all worlds.

As a result, a bounce, if any, in the GBP/USD, will likely be short-lived. Should the pair close below 1.30, a deeper sell-off to 1.2905 (61.8% Fib R of Aug. 15 low/Sept. 20 high) could be in the offing.

Technical Levels

Resistance: 1.3084 (50-hour EMA), 1.31 (10-day EMA), 1.3147 (100-day EMA)

Support: 1.30 (trendline + 76.4% Fib), 1.2921 (Oct. 4 low), 1.29 (psychological support)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD seems vulnerable near mid-1.3500s; UK CPI/FOMC Minutes awaited

The GBP/USD pair struggles to capitalize on the previous day's late rebound from an over one-week low – levels below the 1.3500 psychological mark – and trades with a negative bias for the third consecutive day on Wednesday. The downside, however, remains cushioned as investors seem reluctant to place aggressive directional bets ahead of the release of the latest UK consumer inflation figures and FOMC Minutes.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

Top Crypto Gainers: Jito drops, Morpho holds steady, Convex Finance climbs

Decentralized Finance tokens, including Jito, Morpho, and Convex Finance, rank among the top-performing crypto assets over the last 24 hours. Jito dips on Wednesday after rallying 22% the previous day on the launch of a new mainnet node.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.