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GBP/USD Daily Forecast – Cable Bears Driving the Pair to its Four-Month Bottom

Nikhil Khandelwal

The Cable extended its two-week plunge rally into today’s session. The pair opened up on Tuesday near 1.2727 bottom levels. During the initial trading hours, the pair seemed to lack direction and remained silent for a while. However, the GBP/USD pair resumed the downtrend in the next move. The pair touched the multiple month lows near 1.2702 levels.

Upcoming PM’s Cabinet meeting will reveal the “New Modified Deal”

Today the UK Prime Minister will meet the Cabinet to finalize and disclose her “modified deal” for Brexit. This improved version of Brexit was claimed to remain inclusive of Customs-Union and environmental norms. And further, this deal may help the PM to win the support of the Opposition party as well. But many politicians continued to remain skeptical over the PM’s improved deal.

Yesterday, the Brexit secretary, Stephen Barclay has emphasized upon mitigating no-deal Brexit situation. Mr. Barclay called for the government to put forward specific measures in case of failure in the fourth Parliamentary voting.

Highlighting more on the no-deal threats, Amber Rudd, the leader of One Nation Group, also attempted pitching for the same. Mr. Rudd is set to meet his counterparts to avoid rival candidates to succeed in getting no-deal Brexit. The group consists of 60 MPs who are crucial in influencing the selection of the final candidate for the EU. The current situation in the UK is demanding to avoid any mishaps of no-deal Brexit.

Recently Chancellor Philip Hammond talked about warning the Conservative leaders who try to “hijack” Brexit. According to him, one of the perils caused after a no deal is damaging the UK’S economy. The Chancellor believed that the new Prime Minister replacing Theresa May, could also not make definite plans for Brexit. Therefore, in light of this situation, he urged to Torie’s group not to create setbacks for Brexit deal.

Update on EU Elections

Over the EU elections front, the pro-Brexit and the anti-Brexit appeared competing for neck-to-neck with each other. A recent Survey defined that, the Brexit bifurcation was running deeper among the Conservative and Labour parties Sentiments.

On the USD side, the Greenback skyrocketed during the Asian session today. A piece of news reported that the US Government had eased the restrictions on the Huawei. This news helped the Green money to climb upwards. Following this boost in the US Dollar Index and the Brexit fundamentals, the Cable observed a plunge during the day.

GBP/USD Influencing Events

At 10:00 GMT, the Confederation of British Industry will broadcast the MoM Industrial Trends Survey for the UK. This report is the only GBP-specific event lined up today.

On the USD front, the Existing Home Sales MoM will get published in the European trading session. The consensus estimates the number to come around 5.33 million to the previous figures. Laterwards, the Redbook Index and the MoM Existing Home Sales Change will get released. The analysts remain bullish with the Home Sales Change report.

Technical Analysis

GBPUSD 60 Min 21 May 2019

The Cable was hovering in the lower vicinity of the Bollinger Bands (BB). And, this indicated for a bearish prospect over the pair. The EMA stood above the GBP/USD pair alluding strong bear call. Moreover, the narrow channels of the BB showcased a sell-signal. At 06:00 GMT, the Cable breached the lower levels of BB and hovered near 1.2708 levels. If the pair continues to fall more, then it may find the next support point near 1.2670 levels.

The Relative Strength Index (RSI) appeared around 29 levels which referred a heavy selling among the traders of the pair. A Descending Triangle in the given 1-Hour Chart indicates a breakdown around 1.2696 levels.

This article was originally posted on FX Empire