GBP/USD retraces from 5-week high amid fewer fresh catalysts from UK

Less dovish Fed speak, no-deal Brexit fears weaken the GBP/USD.
The BOE’s quarterly inflation report hearings on the spotlight.
Fewer moves by the pair can be expected between 50 and 21-DMA.

Anil Panchal FXStreet

While renewed fears of no-deal Brexit and less dovish Fed speak dragged the GBP/USD pair back from a month’s high, the Cable trades little changed near 1.2690 during early Wednesday.

The UK Prime Minister (PM) prospect, Boris Johnson, was on wires via BBC when he reiterated his previous pledge to leave the EU on October 31. He also mentioned using WTO rules if necessary.

On the other hand, policymakers from the US Federal Reserve, including the Chairman Jerome Powell, remained less dovish while turning down the odds of the need for an immediate rate cut.

During early Wednesday, the other candidate for the UK PM’s race, Jeremy Hunt, was interviewed by the BBC. He tried assuring British voters that he can get a new Brexit deal from the EU because of his personality. However, the British Pound (GBP) showed little reaction to the comments.

Looking forward, Bank of England’s (BOE) quarterly inflation report hearings and a press conference by the Governor Mark Carney will be the key to follow for fresh impulse.

Technical Analysis

A 21-day moving average (21-DMA) acts as immediate support for the pair around 1.2667 ahead of shifting the bears’ attention to May low surrounding 1.2560.

Alternatively, an upside clearance of 50-DMA figure of 1.2800 highlights April low near 1.2865 and 200-DMA level of 1.2923 as follow-on resistances to watch

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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