• Reaction to May’s announcement to step down turned out to be short-lived.
• Renewed fears of a no-deal Brexit promoted some fresh selling at higher levels.
• Weaker US data kept the USD on the defensive and helped limit the downside.
The GBP/USD pair extended its intraday retracement slide from levels beyond the 1.2700 handle and is currently placed at the lower end of its daily trading range.
With investors looking past upbeat UK retail sales data, the UK politics once again dominated the headlines on Friday and turned out to be one of the key factors influencing the sentiment surrounding the British Pound. The UK PM Theresa May announced that she will be stepping down as Party leader on June 7th and the market reacted positively, providing a minor boost to the Sterling and lifting the pair to an intraday high level of 1.2718.
The uptick, however, turned out to be short-lived, rather met with some fresh supply at higher levels speculations that a pro-Brexit hardliner might lead the UK into a no-deal split. Moreover, the fact that Brexit impasse will remain regardless of a new leader, which further collaborated towards to the pair's intraday pullback of around 70-pips.
The latest comments by the UK lawmaker Boris Johnson - a leading candidate to replace Theresa May, saying that we will leave the EU on Oct. 31, with or without a deal, and the way to get a good deal is to prepare for a no-deal scenario also did little to impress the GBP bulls.
Meanwhile, the US Dollar held on the defensive following the disappointing release of US durable goods orders data and retreated farther from two-year tops set in the previous session, which eventually turned out to be the only factor helping limit further downside at least for the time being.
Technical levels 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.
Recommended content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.