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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD under pressure under 1.1850 amid US election concern

EUR/USD is under some pressure below 1.1850 the anti-risk dollar is drawing haven bids on reports of meddling in US elections and fading prospects of an imminent US stimulus deal. US jobless claims are eyed.


GBP/USD drops below 1.31 amid negative rate talks

GBP/USD has slipped under 1.31 after BOE member Haldane reiterated the bank is studying negative rates. Earlier, the resumption of Brexit talks boosted the pound. Coronavirus measures and restrictions are eyed.


Gold off lows, still in the red around $1920 region

Gold traded with a mild negative bias through the early European session, albeit has managed to trim a part of its daily losses to the $1911-10 region.

Gold News

Forex Today: Foreign intervention in US elections weighs on mood, jobless claims, politics eyed

Concerns about foreign intervention in the US elections have weighed on the market mood, allowing the dollar to recover after Wednesday's losses. Intense Brexit talks resume in London, boosting the pound.

Read more

WTI Price Analysis: Recovery remains capped below 100-DMA

WTI (futures on NYMEX) is fading its recovery attempt in the European session this Thursday, as the risk-off sentiment dominates amid surging coronavirus cases in the Old continent and diminishing prospects of a US fiscal stimulus deal. 

Oil News