GBPUSD pair has maintained a steady bullish price action so far this week on Brexit hopes. Lack of major macro data updates and high impact headlines combined with weaker USD also underpinned GBP bulls in the broad market. News hit the market earlier this week that PM May was looking to make amendments to UK’s withdrawal agreement with EU during their face to face meeting in Brussels and another UK minister commenting that possibility of no-deal Brexit was unlikely and this inspired bulls to stage steady upside action breaching 1.31 handle during London market hours yesterday. However, news hit the market that three lawmakers left PM May’s Tory party as they were unsatisfied with the direction in which Brexit was heading towards.
US Dollar’s Saw Subdued Rebound on Mixed Singal From Fed Meeting Minutes
Meanwhile, US Fed meeting minutes released yesterday also failed to drag the pair on bear’s path as the report expressed mixed signals on Fed’s stance while Fed member Robert Kaplan during his speech last night reiterated that Fed is going to maintain a patient approach to rate hike plans for 2019. Kaplan stated that global deceleration is likely to continue and resulting weaker business outlook is a reason to maintain a cautious stance. While Dollar saw a slight rebound on the mixed signal in the broad market, the decline was capped at mid-1.30 handle where the pair has since maintained a rangebound price action. As of writing this article, GBPUSD pair is trading at 1.3075 up by 0.18% on the day. Brexit headlines continue to remain the main driving force behind the pair’s price action.
Yesterday’s meeting between EU’s Juncker and UK PM Theresa May seems to have ended on a positive note as they commented that the meeting was constructive when questioned by the press but didn’t mention any details about amendments to withdrawal agreement. This resulted in British Pound losing its bullish edge as news from early in the week didn’t come to pass. Investors now await US macro data update for short term profit opportunities and directional cues. While Brexit controls price action of GBP in the broad market, now that it has lost its positive edge, lack of solid progress is likely to add bearish pressure on GBP. Further, a positive macro data outcome is likely to influence USD’s recovery in the broad market which will open the path to sharp declines. The pair needs to breach immediate support at 1.3050 and 1.3000 for USD to regain positive price action while GBP needs a break above 1.3100 handle above which a sustained rally is required for GBP to maintain dominance in the broad market.
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This article was originally posted on FX Empire
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