- A modest intraday USD pullback extended some support at lower levels.
- The UK political drama continues to weigh on the GBP and capped gains.
- The key focus remains on the Tory leadership contest results on Tuesday.
The GBP/USD pair quickly recovered around 30-35 pips from daily lows, albeit lacked any follow-through and remained below the key 1.2500 psychological mark.
After an initial uptick to levels beyond the 1.2500 handle, the pair met with some fresh supply and dropped to an intraday low level of 1.2456 in reaction to the UK Foreign Office Minister Sir Alan Duncan's resignation.
This coupled with the fact that some of the key Tory members - including the UK chancellor of the exchequers Phillip Hammond, stand ready to resign further collaborated to the pair's sharp intraday slide of around 60-pips.
The sentiment deteriorated further after NIESR think tank said that Brexit uncertainty could have already pushed the UK economy into recession and the country is expected to stagnate next year in case of an orderly no deal.
Meanwhile, the US Dollar failed to capitalize on its intraday positive move and eased a bit in the last hour, which turned out to be the only factor that helped the pair to stage a modest bounce from daily swing lows.
The pair, however, seems unlikely to make it back above the 1.2500 handle as investors might hold place any aggressive bets ahead of the outcome of the Tory leadership contest, expected to be announced on Tuesday.
Hence, it would be prudent to wait for a sustained move in either direction before traders start positioning for any meaningful intraday momentum amid absent relevant market moving economic releases.
Technical levels to watch
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.