GBP/USD: Stabilizing near 5-month low amid political/Brexit uncertainty

Doubts of the UK’s economic strength, political future gain attention.
The second round of Tory voting, speech from BoE’s Carney in the spotlight.

Anil Panchal FXStreet

With the growing challenges to the UK’s economy joining political uncertainty surrounding the race to be the British Prime Minister, the GBP/USD pair slipped to the fresh five-month low on Monday and is currently stabilizes near 1.2540 during early Tuesday.

Not only pessimistic survey results from the British Chambers of Commerce but sluggish housing data from the UK also highlights fears that the economy is in a fragile state and not be able to bear the shock of hard Brexit.

At the political front, the lead candidate for the UK PM Boris Johnson avoided a television debate where soft Brexit supporters ruled the discussion. The same stirs up the uncertainty ahead of today’s second round of Tory voting.

Looking forward, investors will give higher importance to the Bank of England’s (BOE) Governor Mark Carney’s speech at the ECB forum in Sintra together with results of Tory leadership contest where six out of previous 10 candidates will be voted to lead the nation.

While BOE’s Carney is less likely to mention any negative statements concerning his recent upbeat appearance, chances of citing Brexit uncertainty as a greater challenge can’t be ruled out. On the other hand, any surprise results from the Tory voting could trigger the Cable’s wild moves.

Technical Analysis

Having breached May month low, December 2018 bottom surrounding 1.2480 and then the year 2019 low near 1.2430 are likely next on the bears’ radar whereas an upside break of 1.2560 becomes necessary for the pair to aim for recovery targeting 1.2660 and 1.2710 numbers to the north

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.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Breaking: US and Israel attack Iran, risk aversion to sweep global markets

Early Saturday, United States (US) President Donald Trump announced that the US had begun “major combat operations” in Iran, following Israel’s pre-emptive missile attacks against Tehran.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.