GBP/USD: Will the recovery sustain amid UK political woes?


  • DXY offered in Asia.
  • The UK politics and PM May terror attack news weigh.
  • The US ADP jobs data eyed.

The GBP/USD pair extended its overnight declines in Asia and went on to hit a low just ahead of 1.34 handle before finding fresh bids on broad USD sell-off.

GBP/USD: Resilient to risk-off

 The spot accelerated its pace of decline in early Asia after the pound ran through fresh offers on the news of a plot to assassinate the UK PM Theresa May by the Islamist terrorists hit the wires, although the security services stopped the Islamist suicide bomb plot.

However, over the last hours, GBP/USD is seen making minor-recovery attempts, as the US dollar stalled its US tax reform optimism led upsurge and extended its overnight drop on fears of a possible US government shutdown and dovish remarks from the Chicago Fed President Evans.

In the US last session, Cable came under heavy selling pressure on the back of the renewed jitters surrounding the UK political climate, after the Telegraph reported that Theresa May is facing a Cabinet revolt after Brexiteers led by Boris Johnson and Michael Gove expressed “genuine fear” the PM is trying to force through a soft Brexit. Also, downbeat UK services PMI reading collaborated to the weakness seen around the GBP.

Looking ahead, in absence of macro news from the UK docket, markets will eagerly await the US ADP employment data for fresh momentum on the prices.

GBP/USD Technical Levels

According to Valeria Bednarik, Chief Analyst at FXStreet: “The GBP/USD pair closed lower for a second consecutive day, intraday poised to extend its decline according to technical readings in the 4 hours chart, as the pair is developing below a bearish 20 SMA, which now stands near the 23.6% retracement of the latest bullish run at 1.3470, while technical indicators hold within negative territory, turning marginally lower after nearing their mid-lines, not enough, however, to confirm additional slides ahead that anyway will be directly correlated to Brexit headlines. Support levels: 1.3420 1.3375 1.3340. Resistance levels: 13470 1.3510 1.3550.”

Share: Feed news

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


Recommended content

Editors’ Picks

AUD/USD regains the constructive outlook above the 200-day SMA

AUD/USD regains the constructive outlook above the 200-day SMA

AUD/USD advanced strongly for the second session in a row, this time extending the recovery to the upper 0.6500s and shifting its focus to the weekly highs in the 0.6580-0.6585 band, an area coincident with the 100-day SMA.

AUD/USD News

EUR/USD keeps the bullish performance above 1.0700

EUR/USD keeps the bullish performance above 1.0700

The continuation of the sell-off in the Greenback in the wake of the FOMC gathering helped EUR/USD extend its bounce off Wednesday’s lows near 1.0650, advancing past the 1.0700 hurdle ahead of the crucial release of US NFP on Friday.

EUR/USD News

Gold stuck around $2,300 as market players lack directional conviction

Gold stuck around $2,300 as market players lack directional conviction

Gold extended its daily slide and dropped below $2,290 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield erased its daily losses after US data, causing XAU/USD to stretch lower ahead of Friday's US jobs data.

Gold News

Bitcoin price rises 5% as BlackRock anticipates a new wave of capital inflows into BTC ETFs from investors

Bitcoin price rises 5% as BlackRock anticipates a new wave of capital inflows into BTC ETFs from investors

Bitcoin (BTC) price slid to the depths of $56,552 on Wednesday as the cryptocurrency market tried to front run the Federal Open Market Committee (FOMC) meeting. The flash crash saw millions in positions get liquidated.

Read more

FOMC in the rear-view mirror – NFP eyed

FOMC in the rear-view mirror – NFP eyed

The update from May’s FOMC rate announcement proved more dovish than expected, which naturally weighed on the US dollar (sending the DXY to lows of 105.44) and US yields, as well as, initially at least, underpinning major US equity indices.

Read more

Forex MAJORS

Cryptocurrencies

Signatures