The GBPUSD pair has took a rollercoaster ride on Monday as pair hit 1.3132, surpassing last week’s high, but plunging to 1.3027 later, to finally found some stability at around 1.3090. The optimism about the EU offering a “super-charged” free-trade deal faded on dollar strength and comments from UK PM May’s spokesman, who said that there is a big difference between optimistic talks and a done deal and that there can’t be no withdrawal agreement without a price future framework. Additionally, it was reported that US Brexit Secretary Raab won’t be heading to Brussels this week which further added pressure to European market indirectly weighing down British Pound. As of writing this article, the GBPUSD pair was trading flat at 1.3091 up 0.01% on the day.
Brexit News to Influence Direction Of Pound’s Price Action in Near Future
The GBP/USD is trading just shy of 1.31 as markets round the corner into Tuesday’s UK market session with expectations of further Brexit headlines. The Sterling is struggling to keep a bullish recovery on the rails from last week’s turnaround at 1.3030, and GBP buyers will be hoping to keep the Cable upright with US markets due to return to the fray later today after a long weekend, but of more import will be ongoing Brexit headlines, and the recent flow of hopeful-leaning headlines are beginning to turn grim once again, as the EU and the UK continue to stare each other down as the clock slowly runs out of time before Brexit. Tuesday will be seeing a steady stream of Brexit headlines, but the tone could turn decidedly bearish as the two sides continue to seem further apart than initial announcements of progress keep making it seem.
The economic calendar for the day remains a thin affair with only a speech from the Bank of England’s Haldane, and the focus will be on Wednesday’s UK month-on-month GDP figures for August at 08:30 GMT and the major figure is forecast to tick down slightly from 0.3% to 0.2%, and a missed reading here could be just what GBP bears are waiting for to begin another round of selling, while today’s US session will have the US PPI figures at 12:30 GMT, forecast moving slightly from 2.3% to 2.4%, though the big US reading for the week will be Thursday’s core inflation figures. There are no clear signs on directional strength in the 4 hours chart, as the price holds ever since the day started above the 20 SMA and the 200 EMA, both now converging around 1.3040, while technical indicators retreated sharply from overbought readings, the Momentum maintaining its downward strength but above its mid-line and the RSI recovering within positive ground limiting chances of a steeper decline. Expected support and resistance for the pair are at 1.3040, 1.3000, 1.2970 and 1.3100, 1.3130, 1.3175 respectively.
This article was originally posted on FX Empire
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