GBP/USD struggling to recover back above 1.3100 handle

Haresh Menghani FXStreet

• Sliding US bond yields help limit deeper losses.
• Renewed UK political uncertainty might cap immediate up-move.

The GBP/USD pair has managed to rebound around 30-pips from multi-day lows but was still seen struggling to move back above the 1.3100 handle.

The British Pound fell sharply at the start of a new trading week amid speculation that the UK PM Theresa May could be pushed aside by members of her governing Conservative Party in a no-confidence vote.

The Sunday Times newspaper reported that as many as 40 MPs, just 8 shy of the total needed to launch a formal leadership challenge, are prepared to sign a letter backing the removal of May over her perceived weakness as Prime Minister and the lack of progress in Brexit talks with European Union officials in Brussels.

The latest political development came at the time when the UK has been asked to provide clarity on the final Brexit settlement bill within 2-weeks and prompted some fresh selling around the British Pound.

• UK: Buckle up... it's going to be a bumpy Brexit ride - ING

The selling pressure, however, seems to have abated, at least for the time being, with a sharp slide in the US Treasury bond yields failing to assist the US Dollar to build on early up-move and providing some respite for the major.

With a data-empty US economic docket, the incoming UK political headline and Brexit news would remain key determinants of the pair's movement through Monday's trading session.

Technical outlook

Bears would be eyeing for a breakthrough Nov. daily closing lows support near the 1.3060 region, below which the pair is likely to head towards testing the key 1.30 psychological mark.

On the upside, any recovery move back above the 1.3100 handle now seems to confront fresh supply near the 1.3130-35 region, above which the pair is likely to head towards the 1.3180-90 region and fill the weekly bearish gap.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD picks up bids above 0.7100 after RBA-speak

AUD/USD picks up bids above 0.7100 in the Asian session on Tuesday, following hawkish comments from RBA Assistant Governor Sarah Hunter and Governor Michele Bullock. However, escalating tensions in the Middle East and the Fed's hawkish outlook remain supportive of the bullish US Dollar undertone, which could limit the pair. The crucial Trump-Xi summit is later this week and remains in focus.

USD/JPY holds small gains near 157.50 as JPY intervention risks loom

USD/JPY posts modest gains while trading near 157.50 in the Asian session on Tuesday as intervention fears help limit losses for the Japanese Yen. However, the BoJ's dovish rate hike to a 31-year high keeps JPY bulls on the back foot. Meanwhile, the US Dollar retains a bullish undertone amid the Fed's hawkish outlook and escalating Middle East tensions, providing tailwinds for the pair.

Gold struggles below $4,350 as hawkish Fed offsets sliding bond yields, softer USD

Gold attracts some sellers following a modest Asian session uptick, and slides below $4,350 in the last hour, though the downside seems limited. The US Federal Reserve's hawkish outlook is seen as a key factor undermining the non-yielding yellow metal.

Pepe signals trend reversal amid a short squeeze

Pepe (PEPE) price is up nearly 30% in the last 24 hours, outperforming most top cryptocurrencies and hinting at further upside potential. Derivatives data suggest a short squeeze of more than $2 million during the same period, forcing traders to buy back positions in the meme coin. The technical outlook for PEPE indicates an upside bias as bullish momentum strengthens.

WTI looks to reclaim $93.00 after defending 38.2% Fibo. support

West Texas Intermediate (WTI) attracts some buyers during the Asian session, snapping a four-day losing streak to sub-$91.00 levels, or a nearly two-week low touched the previous day. The commodity currently trades just below the $93.00 mark, up around 1.40% for the day, as the focus remains on the Middle East crisis.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.