GBP/USD looking to reclaim 1.39 handle in London session

Sterling holding onto long-term bullish territory, but support base is continuing to weaken as Brexit drags.
Little data this week leaves the GBP/USD exposed to overall market sentiment.

Joshua Gibson FXStreet

The GBP/USD is trading lazily ahead of the London market open, sticking in place just beneath the 1.3900 handle.

The Sterling has lifted against the Greenback for four consecutive trading days, but volatility has been restrained and upward movement remains limited. The pair climbed steadily in Tuesday's trading as overall risk appetite took a swing upwards, and market sentiment looks set to continue to be the main driver for the GBP/USD with only low- and mid-tier data on the offering throughout the week.

The RICS Housing Price data will be dropping early Thursday at 00:01 GMT and the forecast is calling for a showing of 17.1% versus the previous 8.0% reading. Nothing of note remains on the docket until Friday at 09:30 GMT, when Manufacturing and Industrial Production figures get released. The month-over-month manufacturing numbers are expected to contract slightly, forecast at 0.2% versus the previous 0.3%, while industrial figures are anticipated to increase to 1.1% after the previous period's -1.3% decline.

The UK economic landscape looks healthy and growing at a quickening pace and the Bank of England (BOE) has plenty to celebrate, with markets widely expecting the UK's central bank to begin lifting interest rates by this May. Despite this, the Sterling is still struggling to make headway against the US Dollar as Brexit concerns continue to drag a toe for the United Kingdom.

Theresa May's speech last Friday that was supposed to provide some much-needed clarity on the Brexit framework left many questions unanswered, as trade arrangements between the European Union and the UK remain up in the air post-Brexit, and hard answers are coming few and far between for UK business operators who still lack answers about what the regulatory field will look like after Brexit begins in earnest next March.

GBP/USD Technicals

The pair continues to drift lower despite a consistent turnout from Sterling bulls, and the Daily candles are routinely trading around the 34 EMA, implying weakness building into the Pound's position. H4 charts tell a gloomier picture, as the pair has been making lower highs for five weeks, and previous support levels from swing lows are rolling over into resistance. Intraday support is currently coming from 1.3815, 1.3765, and 1.3710 with resistance from swing highs at 1.4060 and 1.4145.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD flirts with two-day lows near 1.3180

GBP/USD remains on the back foot in the latter part of Tuesday’s session, sliding to the sub-1.3200 area and challenging weekly lows. Cable’s decline comes as investors assess the political uncertainty in the UK, coupled with softer-than-expected UK PMI data and the better tone in the Greenback.

EUR/USD weakens below 1.1400 on stronger Dollar

EUR/USD adds to Monday’s losses and recedes below the 1.1400 support to clinch fresh 13-month lows in the latter part of Tuesday’s NA session. The pair’s marked sell-off comes on the back of the persistent move higher in th US Dollar, always propped up by rising bets of further tightening by the Fed.

Gold loses ground to near $4,100 as inflation concerns, Fed rate hike bets build

Gold price loses momentum to around $4,100 during the early Asian session on Wednesday. The precious metal extends the decline as traders cement views on the US Federal Reserve hiking interest rates this year.

Australia CPI set to show inflation accelerated again in May

The Australian Bureau of Statistics will publish the high-impact Consumer Price Index for May on Wednesday at 01:30 GMT. Heading into the inflation test, the Australian Dollar is at its lowest level in two months against the US Dollar, having surrendered the 0.7000 psychological mark.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.