- GBP/USD struggles around 1.3050 ahead of European open on Thursday.
- The pair recently drifted lower on negative news for the Brexit and welcome FOMC minutes.
- Additional progress on Brexit and monthly data from the US will direct near-term market movement.
The GBP/USD pair trades little changed to 1.3050 while heading towards European sessions on Thursday. The pair declined on Wednesday as resignations by the UK PM Theresa May’s party members and upbeat FOMC minutes weigh on the sentiments. For now, developments surrounding Brexit and upcoming monthly prints of the US durable goods orders and manufacturing indices will be closely observed for fresh impulse.
In spite of PM May’s ability to make sure that the EU Commission chief Jean-Claude Juncker doesn’t communicate anything negative for Brexit, the GBP/USD couldn’t extend its earlier gains to Wednesday. There seems many reasons for the same but resignations of three Tory members and FOMC minutes can take the first seat.
Three pro-EU lawmakers quit the PM May’s Conservative party on Wednesday as they were unhappy with the government’s “disastrous handling of Brexit”. This renewed concern that PM May will have to struggle big time at the parliament even if she manages to get a good Brexit deal from the EU.
On the other hand, minutes of the January 29-30 Federal Open Market Committee (FOMC) meeting revealed that some among the committee favored rate-hikes during 2019 and an end of balance sheet normalization while leaving the monetary policy unchanged at that meeting. With the minutes reigniting rate-hike concerns, the USD registered across the board gains.
Looking forward, Theresa May is on her last ditched efforts to please EU members over the Brexit proposal before she puts her progress report in front of parliament on February 26. Out of all the issues, an insurance policy to limit extensive checks on the Irish border becomes a big headache for the UK and the EU leaders off-late. It should also be noted that there are no big releases/events scheduled to release from the UK.
For the US, monthly releases of December month durable goods orders and February month Philadelphia Fed manufacturing survey, coupled with Markit composite purchasing managers’ index (PMI), could entertain the USD traders.
The durable goods orders may increase with +1.7% against December month figure of +0.7% whereas Markit composite PMI could strengthen to 55.1 from 54.4 registered in January. However, the Philadelphia Fed manufacturing survey is likely weakening to 14 from 17 earlier.
With the Brexit signaling negative signs for the GBP and market expects upbeat numbers from the US, the GBP/USD pair may witness further downside. Additionally, developments at the US-China trade talks during the Chinese Vice Premier’s two-day visit can also provide intermediate moves to the pair.
GBP/USD Technical Analysis
Failure to surpass 1.3110 seems to drag the GBP/USD pair to 200-day simple moving average (SMA) level of 1.3005, a break of which may take a rest of February 13 high near 1.2960 ahead of visiting the 1.2930 support.
Alternatively, an upside clearance of 1.3110 enables the pair to confront five-month-old descending resistance-line, at 1.3200.
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
AUD/USD edges lower below 0.6620 ahead of the US Services PMI data
The AUD/USD pair post a modest gain during the early Asian session on Tuesday. Investors await the Reserve Bank of Australia policy meeting on Tuesday and no change in rates is expected. AUD/USD pares gains above the 0.6600 level as the USD edges higher against its rivals.
EUR/USD posts modest gains below the mid-1.0800, US ISM PMI eyed
The EUR/USD pair snaps the four-day losing steaks during the Asian trading hours on Tuesday. That being said, the renewed US Dollar lends some support to the pair. The major pair trades around 1.0840, gaining 0.05% for the day.
Gold hovers around $2,030, US Services PMI eyed
Gold edges lower to $2,030 during the early Asian session on Tuesday. Meanwhile, the US Dollar Index rose to 103.60 and the Treasury yields edge higher, with the 10-year yield recovering from 4.24% to 4.32%. XAU/USD price is trading around $2,030, up 0.12% on the day.
Dogecoin Price Prediction: DOGE could hit $0.1 soon if this happens
Dogecoin price is trading with a bullish bias, not only showing a broader market bullishness but also a newly found flow of capital into the meme coin market, with CoinMarketCap data showing meme coins are rallying on the seven-day timeframe.
Australia Interest Rate Decision Preview: Statement looks key as markets widely expect RBA to stand pat
The Reserve Bank of Australia is set to pause its tightening cycle once again, leaving the Official Cash Rate (OCR) unchanged at a 12-year high of 4.35% following the conclusion of its December monetary policy meeting on Tuesday. The decision will be announced at 03:30 GMT.