GBP/USD remains depressed below 1.2700 mark ahead of US data

No-deal Brexit fears continue to keep a lid on any attempted bounce.
The USD builds on the overnight bounce and adds to the selling bias.
Investors now look forward to the US economic data for fresh impetus.

Haresh Menghani FXStreet

The GBP/USD pair failed to capitalize on its intraday up-move beyond the 1.2700 handle and quickly retreated around 25-pips in the last hour.

Having dropped to weekly lows, around the 1.2660 region, the pair gained some traction during the early European session but lacked any strong conviction amid increasing fears of a no-deal Brexit.

The favourite UK PM candidate Boris Johnson's commitment to leave the EU by October 31st, even without a deal held the GBP bulls on the sidelines and continued capping the attempted up-moves.

Investors were further discouraged by the BoE Governor Mark Carney's comments that uncertainty is hurting economic performance and that the central bank may cut rates in case of a no-deal Brexit.

On the other hand, the US Dollar remained supported by the overnight not so dovish comments by St Louis Fed President James Bullard and the Fed Chair Jerome Powell, which added to the selling bias.

Meanwhile, the downside remained limited, at least for the time being, as investors now look forward to Wednesday’s key highlight – the release of US durable goods orders data, for some fresh impetus.

Technical levels to watch

As Yohay Elam, FXStreet's own Analyst notes – “Some resistance awaits at 1.2710 which provided support to the pair earlier this week. It is followed by 1.2765 which was temporarily broken. 1.2815 was a swing high in mid-May, and it is followed by 1.2870 which was April's low.”

“Below uptrend support, the next line to watch is 1.2660 which is the daily low. It is closely followed by 1.2640 that provided support twice in June. 1.2605 capped GBP/USD in mid-June and served as support beforehand. 1.2558 and 1.2505 are next,” he added further.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold picks pace, flirts with $5,000

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.