- Brexit is back at the forefront once again, with PM May digging in her heels and rejecting the ECJ's float of withdrawing Article 50.
- A lack of bidding power underneath the Sterling is keeping the major pairing at bay near five-week lows at the 1.2700 key barrier.
The GBP/USD pairing is off of recent highs once again as Brexit-based volatility is fueling steady drops into new lows, and rising investor fears about a hard Brexit and the upcoming parliamentary vote are keeping the Pound underbid as broader markets seek safe shelter amidst growing fears about a global economic slowdown.
Tuesday saw the Cable set in heavy whipping action, bolstered into near-term highs near 1.2840 after the European Central Justice announced that the UK is essentially free to withdraw Article 50 at anytime, a move that would effectively kill Brexit, but the ECJ's comments were met shortly thereafter by a staunch Prime Minister Theresa May, who sent a spokesperson to announce that the UK would not be quitting Brexit under any circumstances, throwing the Sterling back onto the floor, punching into a new 18-month low at 1.2658 before recovering into 1.2700, a level that GBP/USD is now struggling with in Wednesday's early action.
The economic calendar is a fairly light screening for the GBP, with November's final Markit Services PMI due at 09:30 GMT and forecast to clock in at 52.5, a mild uptick from the previous month's 52.2, while the US market session will be seeing restrained trading volumes with American institutions shuttered in observance of the passing of former President George H.W. Bush.
GBP/USD levels to watch
As noted by FXStreet's own Valeria Bednarik, GBP/USD has maintained steady downside momentum despite plenty of volatility and see-saw action across the charts: "the pair has been extremely volatile, but nothing changed the negative tone, as the early advance was contained by selling interest around the daily descendant trend line coming from 1.3174, November monthly high. In the shorter term, and according to the 4 hours chart, the pair is now developing below a mild-bearish 20 SMA, while technical indicators remain within negative ground, lacking directional strength at the time being, a result of the latest 70 pips' bounce. Another attempt to break below 1.2660 may result in a test of the 1.2588 level, June 2017 monthly low."
Support levels: 1.2690 1.2660 1.2620
Resistance levels: 1.2760 1.2800 1.2840
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
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'