GBP/USD remains vulnerable near 1.2300 handle amid persistent Brexit uncertainties


  • Renewed Brexit-pessimism continued weighing on the British Pound on Monday.
  • Dismal BRC like-for-like sale data further dented the already weaker sentiment.
  • A subdued USD demand seemed to be the only factor lending some support.

The GBP/USD pair lacked any firm directional bias and was seen oscillating in a narrow trading band, just below the 1.2300 handle through the Asian session on Tuesday.
 
The pair did witness some intraday bounce on Monday, albeit lacked any strong follow-through and quickly ran into some fresh supply near the 1.2335 region - an important pivotal point marked by 200-period EMA on the 4-hourly chart. Given that the bloc's officials see the UK PM Boris Johnson's new Brexit plan as insufficient, uncertainties surrounding Britain's exit from the European Union acted as one of the key factors exerting some pressure on the British Pound.

Brexit headlines continue to drive sentiment

This coupled with a modest pickup in the US Dollar demand, supported by a goodish rebound in the US Treasury bond yields and positive trade-related headlines, further collaborated to the pair's overnight downtick. White House economic adviser Larry Kudlow said on Monday that the United States was open to looking at China's proposals and that delisting of Chinese companies was not on the table.
 
The Greenback failed to capitalize on the previous session's move up, albeit the disappointing release of BRC like-for-like sales data - dropping -1.7% YoY in September as compared to -0.5% fall in the previous month - failed to provide any meaningful impetus to the major. This coupled with news that the UK PM Johnson is preparing for Brexit talks to collapse further collaborated towards capping any upside.
 
Given the lack of progress towards agreeing on a Brexit withdrawal deal before the EU Summit on October 17, any negative Brexit-related headlines might be enough to further dent the already weaker sentiment surrounding the Sterling and pave the way for a further near-term depreciating move amid absent relevant market moving economic releases from the UK.
 
Later during the early North-American session, the US economic docket - highlighting the release of Producer Price Index (PPI) - might influence the USD price dynamics and produce some short-term trading opportunities.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2297
Today Daily Change 0.0005
Today Daily Change % 0.04
Today daily open 1.2292
 
Trends
Daily SMA20 1.2382
Daily SMA50 1.2254
Daily SMA100 1.2425
Daily SMA200 1.2721
 
Levels
Previous Daily High 1.2337
Previous Daily Low 1.2287
Previous Weekly High 1.2414
Previous Weekly Low 1.2205
Previous Monthly High 1.2583
Previous Monthly Low 1.1958
Daily Fibonacci 38.2% 1.2306
Daily Fibonacci 61.8% 1.2318
Daily Pivot Point S1 1.2273
Daily Pivot Point S2 1.2255
Daily Pivot Point S3 1.2223
Daily Pivot Point R1 1.2323
Daily Pivot Point R2 1.2355
Daily Pivot Point R3 1.2373

 

 

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