GBP/USD struggles around a week’s low as EU-UK leaders jostle for soft/delayed Brexit

  • GBP/USD traders near 1.3130 ahead of London open on Wednesday.
  • Brexit uncertainty and traders’ preference for the USD dragged the pair to a week’s low.
  • Sustained trading beneath 1.3185 signals the pair’s weakness.

GBP/USD maintained its spot among sellers’ latest favorite around 1.3130 while heading towards the European open on Wednesday. The pair dropped to the low near 1.3120 after Reuters reported no conclusion reached out of the EU-UK leaders’ recent meet. Elsewhere, The Guardian came out with a news report quoting conservative leader that the parliament will take over PM May’s Brexit rights if she fails to get her plan through during the second vote on March 12. Traders may keep observing Brexit updates while giving equal importance to the US data and US-China trade developments to forecast near-term GBP/USD moves.

The GBP/USD pair fall short of pleasing buyers even after registering better than forecast UK Services PMI (51.3 versus 49.9 expected) due to upbeat prints of the US ISM non-manufacturing PMI (59.7 against 57.3 consensus) and New Home Sales (0.621M from 0.6000M forecast) on Tuesday.

Sellers regained control during early Wednesday after Reuters reported that the meeting between Britain’s Attorney General Geoffrey Cox, Brexit Secretary Stephen Barclay and the European Union (EU’s) Brexit negotiator Michel Barnier failed to deliver any conclusion and were stretched to another meeting on Wednesday in Brussels.

Adding to the Brexit uncertainty was The Guardian’s report mentioning that the chief whip of Britain’s conservative party, Julian Smith, warned cabinet ministers of parliament taking the control over Brexit if members of parliament (MPs) reject PM Theresa May’s deal a second time on March 12.

While looming concerns over the UK’s departure from the EU continued hurting GBP, the US Dollar held buyers’ preference as not only latest data but pessimism surrounding rest of the major economies like Australia and Eurozone also pushed traders toward the greenback. Also, positive news from the US-China trade discussion spreads optimism among the USD bulls.

The results of the EU-UK leaders’ meet in Brussels could act as a frontline catalyst for the pair whereas trade updates and the US ADP employment change (expected 189K against 213K) could further validate the moves.

GBP/USD Technical Analysis

GBP/USD’s sustained beneath 1.3185 signal brighter chances of its further declines to 1.3110 and 1.3060 whereas 200-day simple moving average (SMA) at 1.2990 may please bears afterward.

On the upside, break of 1.3185 could open the door for the pair’s rise to 1.3250 and February month high near 1.3350.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD retreats from high, comfortable at higher ground

The EUR/USD pair is trading close but below 1.1300, as the positive momentum was dented by deteriorating EU Consumer Confidence. Dollar remains weak post-Fed.


GBP/USD: Buyers and sellers jostle around 1.2700

With the storm around global financial markets taking a halt after the central bankers’ bearish appearances and the end of the initial selection process for the UK’s PM, the GBP/USD pair cling to 1.2700.


USD/JPY drops to multi-month lows below 107.50 amid escalating geopolitical tensions

After dropping to its lowest level since early January at 107.47, the USD/JPYpair retraced a small portion of its daily fall but came under renewed bearish pressure in the American session.


Gold fluctuates near multi-year highs above $1380, adds more than $20 on the day

With major central banks adopting a more cautious tone with regards to the economic outlook and hinting at rate cuts this week, gold became an investor favourite & the troy ounce of the precious metal rose more than $50 since the start of the week.

Gold News

FOMC: Prelude to a rate cut?

The Federal Reserve added little new to its policy prescript in Wednesday’s FOMC statement and economic projections and with the anticipation for a July rate cut long priced into market levels the reaction was decidedly uninvolved.

Read more