GBP/USD stutters back into 1.33 after the UK's David Davis resigns as Brexit Secretary

The Sterling kicked off the week with a bullish jump, but Brexit headlines are keeping GBP traders hesitant.
UK PM May to face further opposition as pro-Brexit Tories edge towards making an outright leadership challenge.

Joshua Gibson FXStreet

The GBP/USD saw a stumble early in the new trading week, with the pair's bullish gap into 1.3318 saw a quick drop into 1.3286 following headlines that the UK's Brexit Secretary David Davis has resigned from his position in protest of Prime Minister Theresa May's No10 "soft Brexit" proposal. The GBP/USD is now trading near the 1.3300 major level, and Monday's bullish momentum has come up against a fundamental boundary.

The UK's David Davis has been confirmed to have resigned from his position as Brexit Secretary following the UK cabinet's agreement to PM May's new Brexit proposal, with hard-line Brexiteers including Davis angry over the agreement, claiming that the new proposals betray the original referendum result.

The Sterling heads into the new week with an early challenge to recent bullish momentum, and Sterling traders will be wary of upcoming challenges to Prime Minister May's leadership from hard-liners within the UK's Tory party.

GBP/USD levels to watch

according to FXStreet Chief Analyst Valeria Bednarik: "readings in the daily chart favor additional gains, as the pair ended well above a mild bearish 20 SMA, while technical indicators head north within positive territory, at their highest since last April. In the 4 hours chart, a bullish 20 SMA keeps leading the way higher, attracting buyers on intraday pullbacks, while technical indicators also maintain their bullish slopes, but below this month highs. The 200 EMA in this last time frame comes at 1.3310, while a relevant high is located at 1.3314, making of the 1.3310 an immediate and strong resistance."

Support levels: 1.3250 1.3210 1.3170

Resistance levels: 1.3315 1.3350 1.3390

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.

AUD/USD sits near monthly high, around 0.7035 on hawkish RBA

AUD/USD trades around 0.7030-0.7035 in the Asian session on Thursday, near its monthly top, as recent hawkish comments from RBA officials continue to underpin the Australian Dollar. The US Dollar, meanwhile, struggles to lure buyers amid further declines in US bond yields, adding support to the pair. However, Fed rate-hike bets and geopolitical uncertainty help limit losses for the safe-haven buck, warranting caution for Aussie bulls.

USD/JPY remains confined in a familiar range; holds steady above 158.00

USD/JPY extends its consolidative price action through Thursday's Asian session, trading just above 158.00 amid diverging forces. Uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. The US Dollar, meanwhile, languishes near multi-week low amid declining US bond yields. Furthermore, looming intervention risks limit JPY losses and cap the pair. Traders also seem hesitant ahead of the Fed and BoJ meetings next week.

Gold weakens to near $4,110 amid broader strength in oil prices

Gold is down 1% to near $4,095 in the Asian trading session on Thursday on the back of fears that global inflation expectations could accelerate further due to heightened geopolitical tensions in the Middle East.

XRP and XLM recovery stalls below EMAs

Ripple (XRP) and Stellar (XLM) remain under pressure on Thursday as both struggle to sustain their recent recovery attempts. XRP trades below $1.36, while XLM slips beneath $0.183, as mixed derivatives metrics, weakening momentum indicators and heating market conditions suggest cautious market sentiment. Derivatives data shows weakening conditions for Ripple and Stellar.

What the midterm elections mean for Treasury yields, the Dollar and Gold

Democrats are priced to take the House, so November 3 comes down to the Senate and how much Washington can borrow without the other party. Treasury yields will show the answer first, then the Dollar and Gold. On November 3, Americans vote for all 435 House seats and 35 Senate seats. For bond prices, the result comes down to one thing: how much the government will borrow over the next two years.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.