GBP/USD set for a challenge of 1.3000, lagging UK retail sales clouding the picture

Despite a bullish push to end the week, Cable markets remain tense as Brexit uncertainty settles in for the long haul.
PM May may have won her no-confidence vote, but her hands remain tied, with only days to produce an alternative Brexit deal.

Joshua Gibson FXStreet

GBP/USD is trading just south of the major 1.3000 handle as Pound sentiment improves heading into the week's end, with the Cable floating near 1.2980 and sticking near Thursday's closing prices.

Retail Sales data is slated for Friday morning, dropping at 09:30 GMT with December's annualized Retail Sales forecast to hold steady at 3.6%, but the decidedly mid-tier data is unlikely to drive much attention as markets remain focused on Brexit developments.

Prime Minister Theresa May, having survived a no-confidence vote, still faces an unwinnable uphill task, with a deadline of Monday to produce an alternative Brexit withdrawal agreement, or PM May may have no choice but to face a Brexit delay despite her government's vehement opposition to such a move. But in the interest of averting an economic disaster in the shape of a hard Brexit, May's government may face no choice but to face down an extension of Article 50, and the Brexit wheel is set to resume turning over slowly after two years of little to no progress, and the grim reality facing the Cable could see the GBP restrained in the long-term, but in the meantime, Pound traders are enjoying a much-needed bounceback at the tail-end of a tough week.

GBP/USD Levels to watch

Despite Brexit uncertainty set to continue into the future, Sterling traders are beginning to finally push out for more gains, and GBP/USD is set for a bullish continuation according to FXStreet's own Valeria Bednarik:

The pair is technically bullish, approaching the key 1.3000 mark. The 4 hours chart shows that a bullish 20 SMA keeps providing intraday dynamic support, currently at around 1.2870, while the indicator keeps advancing above the 200 EMA, this last modestly bullish over 200 pips below the current level. The RSI indicator in the mentioned chart near oversold levels, while the Momentum maintains a bullish slope well above its midline, indicating the advance may continue during the upcoming sessions.

Support levels: 1.2930 1.2885 1.2840
Resistance levels: 1.3000 1.3035 1.3080

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD corrects lower, returns to 1.1650

EUR/USD could not sustain an earlier move to fresh tops just above 1.1680 on Thursday, coming under fresh selling pressure and revisiting the mid-1.1600s in the latter part of the NA session. The pair’s correction comes in response to an acceptable bounce in the US Dollar.

GBP/USD attempts some consolidation near 1.3350

GBP/USD is alternating gains with losses near 1.3350 on Thursday. The Greenback’s attempts to recover aren't really sticking, upbeat data or not, as traders stay confident that the Fed will deliver a 25 bps rate cut at its final meeting of the year.

Gold bull-bear tug-of-war extends ahead of US data

Gold struggles around $4,200 early Friday, eyes a modestly flat close to the week. US Dollar turns south alongside Treasury bond yields amid Fed rate cut buzz. Gold remains confined within a tight range; buyers refuse to give up yet.

XRP slides amid record on-chain activity, mixed technical signals

Ripple (XRP) is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.

Why the Fed may cut rates in December: Understanding the policy shift

The Fed has gone through a noticeable policy swing in recent months - from initiating a rate cut, to signaling a potential pause, and now shifting once again toward another cut in December. This has created understandable confusion among traders and investors trying to interpret the Fed’s reaction function.

XRP edges lower despite record on-chain activity and steady ETF inflows

Ripple is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.