GBP/USD remains subdued ahead of Brexit talks at Brussels

  • UK’s political uncertainty drags the GBP/USD from the monthly top.
  • British politicians are active to defy no-deal Brexit, expected proroguing of the Parliaments.
  • All eyes on David Frost’s visit to the EU headquarter.

Despite surging to a four-week high the previous day, GBP/USD fails to keep the upside momentum intact as expectations of an early election at home and challenges to the UK PM Johnson threaten Cable buyers ahead of Brussels visit by the Chief Brexit Adviser. The quote declines to 1.2272 by the press time of pre-London open on Wednesday.

Prices rallied to monthly high on Tuesday after the cross-party Members of the Parliaments (MPs) pledged to defy no-deal Brexit, even without toppling the UK Prime Minister (PM) Boris Johnson.

During the early Asian session, speculations were on the round that the UK is heading for an early election after British Finance Minister’s office canceled his speech before 24 hours of the announcement of new spending plan. The Chancellor Sajid Javid will now announce fresh spending plan on September 04 that is expectedly having an annual review period versus the earlier three-year timeline, as per the Guardian.

Elsewhere, the opposition Labour party leader Jeremy Corbyn writes to many Tory rebels to support his cause of blocking the no-deal Brexit after MPs smashed his dream of being an interim UK PM. Further, some of the policymakers are preparing for an alternative parliament in case the British PM prorogues the present one.

In the case of the US Dollar (USD), upbeat data and a lack of market response to the US President Donald Trump’s criticism of the Fed’s policies favored the greenback’s run-up. However, risk sentiment remains heavy with the US two-year yields crossing the 10-year ones and signaling a global recession.

Moving on, the UK PM’s Chief Brexit Adviser David Frost’s visit to Brussels will be in the spotlight after the EU’s recent comments showing readiness to accept a workable solution for Irish backstop. The Brexit Sherpa is likely to push the regional leader for Irish backstop solution while visiting the headquarters, which if received positive replies will become a strong plus for the Cable.

Technical Analysis

While 1.2200 and a two-week-old rising trend-line at 1.2120 limit the pair’s near-term declines, 50-day simple moving average and July 17 low around 1.2372/82 becomes the key upside resistance 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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD: Bears stepping in below 1.1600, focus on ECB, US GDP

EUR/USD remains under pressure below 1.1600, as the US dollar extends the late Wednesday bids amid broad risk-aversion. Traders turn cautious amid stagflation fears and ahead of Thursday's ECB policy decision and the US Q3 GDP release. 


GBP/USD: Sellers attack 50-DMA on monthly support break

GBP/USD prints a three-day downtrend following the key support break, pressured around 1.3740 during the early Asian session on Thursday. The cable pair broke an ascending support line, now resistance, from September 30 the previous day but refrained from closing below 50-DMA.


Gold remains pressured near $1,800 amid USD recovery

Gold prices surrender the previous session's gains and struggle to defend the $1,800 mark. The US 10-year Treasury yields rebound from the early lower levels to trade at 1.55%, following the upcoming BOJ and the ECB policy meetings on the day.

Gold News

Shiba Inu could surpass Dogecoin after a 700% SHIB price rally in October

Shiba Inu (SHIB) continued its march upward on Oct. 27, with its price hitting a record high of nearly $0.000060 before correcting lower. SHIB rallied by more than 25% to an all-time high of $0.00005959, crossing above its previous all-time high of 0.00005000, according to data from Binance.

Read more

BOJ Preview: Focus on outlook tweaks ahead of general election Premium

Despite the recent depreciation in the yen and rising energy prices, the Bank of Japan (BOJ) is likely to maintain its monetary policy settings on Thursday, as it concludes its two-day monetary policy review meeting.

Read more