GBP/USD recovers above 1.31, eyes on EU summit

Eren Sengezer FXStreet

The GBP/USD pair came under a new selling pressure in the Asian session and plummeted to a fresh 10-day low at 1.3087 before staging a modest recovery. As of writing, the pair was trading at 1.3135, still losing 0.18% on the day.

After the US Senate approved a budget blueprint, which would open the door for the Trump administration to go on with the tax-reform even if Democrats didn't support it, boosted the greenback, lifting the US Dollar Index to 93.40 and weighed on the pair. However, ahead of the European session start, the DXY started to consolidate its recent upsurge and allowed the pair to retrace a portion of its losses. The index was last seen at 93.25, up 0.26% on the day.

In the meantime, speaking on the sidelines at the EU summit, European Commission President Jean-Claude Juncker said that he was assuming that they wouldn't end up with a no-deal on Brexit. Later in the day, EU leaders will be discussing Article 50, which will be followed by a joint press conference by the President of the European Council and the President of the European Commission at 12 GMT. An optimistic tone over the Brexit discussions could allow the GBP to gather strength against its peers.

Brexit: Focus on outcome of EU leaders summit - TDS

The economic calendar will be relatively quiet on Friday, leaving the pair at the mercy of Brexit headlines and DXY movements.

UK: Slow progress – ING

Technical outlook

The immediate support for the pair aligns at 1.3100 (100-DMA/psychological level) before 1.3030 (Oct. 6 low) and 1.3000 (psychological level). On the flip side, resistances could be seen at 1.3215 (50-DMA/20-DMA), 1.3300 (psychological level) and 1.3340 (Oct. 12 high). The RSI indicator on the daily graph for the pair stays below the 30 mark, suggesting that sellers are still in control.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.