- GBP/USD seesawed between tepid gains/minor losses through the mid-European session.
- The incoming Brexit-related headlines kept a lid on any meaningful move up for the major.
- A subdued USD price action helped limit the downside ahead of top-tier US macro releases.
The GBP/USD pair managed to rebound around 50 pips from the European session lows and is currently placed in the neutral territory, around mid-1.3300s.
The pair once again struggled to capitalize on its intraday positive move and started retreating from the 1.3385 region. The British pound started losing ground after the European Commission president Ursula von der Leyen raised doubts over the prospects for a Brexit deal. The top eurocrat said the disagreement over access to Britain's fishing waters continues to block progress.
Meanwhile, British Prime Minister Boris Johnson reiterated that the UK's position on fisheries hasn't changed. Johnson further added that they will not ask for additional time to negotiate the trade deal with the European Union. With very little time left before the Brexit transition periods end on December 31, the lack of progress on key sticking points took its toll on the sterling.
The GBP/USD pair retreated around 80 pips from daily swing lows and was further pressured by a modest US dollar rebound amid some repositioning trade ahead of top-tier US macro releases. Despite the negative factors, the pair attracted some dip-buying near the 1.3300 mark and the subsequent rebound suggests that investors remain optimistic about the possibility of a last-minute Brexit deal.
Market participants now look forward to US economic docket – highlighting the releases of the preliminary (second estimate) GDP report, Durable Goods Orders and Initial Weekly Jobless Claims – for some impetus. The key focus, however, will be on the latest FOMC meeting minutes, which will play a key role in driving the near-term sentiment surrounding the greenback.
Apart from this, investors will also keep a close eye on fresh Brexit updates. Any positive development might be enough to provide a strong boost and assist the GBP/USD pair to break past a key barrier near the 1.3400 round-figure mark. The momentum could then push the pair towards September monthly swing highs, around the 1.3480 region en-route the key 1.3500 psychological mark.
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.