GBP/USD Forecast: No-deal Brexit looms, pound under siege

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3227

Odds for a no-deal Brexit continue to increase ahead of January 1.
EU’s Ursula Von Der Leyen told EU leaders that a no-deal is the most likely outcome.
GBP/USD is at risk of falling further, all eyes on the 1.3000 threshold.

Diminished chances of a Brexit deal had hit the Sterling Pound last week, resulting in GBP/USD plummeting to 1.3133, its lowest in almost a month. The pair bounced ahead of the weekly close to settle in the 1.3220 price zone, still at risk of collapsing on a no-deal between the UK and the EU. By the end of the week, UK PM Boris Johnson said that it is “very, very likely” that the UK will have to trade with the EU on WTO terms, while EU’s Ursula Von Der Leyen told EU leaders that a no-deal is the most likely outcome.

Both parts set a deadline for this Sunday to find an agreement, although, at the time being, no progress has been reported. Johnson and Von der Leyen agreed to continue discussions this week ahead of January 1, while the pair is expected to remain under selling pressure. The United Kingdom won’t publish relevant data this Monday.

GBP/USD short-term technical outlook

In the daily chart, the GBP/USD pair is poised to extend its decline, as it has broken below its 20 DMA and approached the 100 DMA, which provides support at 1.3090. Technical indicators have crossed their midlines into negative territory, maintaining their bearish slopes. In the 4-hour chart, the risk of a bearish extension is even higher, as the pair has broken below all of its moving averages, while technical indicators stand near oversold readings without signs of downward exhaustion.

Support levels: 1.3210 1.3165 1.3120

Resistance levels: 1.3255 1.3300 1.3345

View Live Chart for the GBP/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD weakens as US jobs data trims Fed rate cut bets

The EUR/USD pair trades in negative territory for the third consecutive day near 1.1860 during the early European session on Thursday. Traders will keep an eye on the US weekly Initial Jobless Claims data. On Friday, the attention will shift to the US Consumer Price Index inflation report.

GBP/USD bullish outlook prevails above 1.3600, UK GDP data looms

The GBP/USD pair gains ground near 1.3635, snapping the two-day losing streak during the early European session on Thursday. The preliminary reading of UK Gross Domestic Product for the fourth quarter will be closely watched later on Thursday. The UK economy is estimated to grow 0.2% QoQ in Q4, versus 0.1% in Q1.

Gold remains on the defensive below two-week top; lacks bearish conviction amid mixed cues

Gold sticks to modest intraday losses through the Asian session on Thursday, though it lacks follow-through selling and remains close to a nearly two-week high, touched the previous day. The commodity currently trades above the $5,070 level, down just over 0.20% for the day, amid mixed cues.

UK GDP set to post weak growth as markets rise bets on March rate cut

Markets will be watching closely on Thursday, when the United Kingdom’s Office for National Statistics will release the advance estimate of Q4 Gross Domestic Product. If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.