- The cross-party Brexit talks and second-tier data awaited to challenge nearby resistance.
- 200-day SMA continues to offer strong downside support.
GBP/USD holds tightly to the 50-day SMA around 1.3100 ahead of the London open on Thursday. The Cable initially took advantage of the EU summit outcome that offered Brexit deadline extension. However, uncertainty surrounding cross-party talks at home still challenges the buyers.
The British Pound (GBP) previously took advantage of soft data from the US and not so upbeat FOMC minutes confronting optimism surrounding the Brexit deadline extension.
The positive news reports spread through the market at the end of the EU summit that provided a flexible extension to the Brexit deadline from April 12 to October 31. The UK will also have rights to vote on the EU election and can propose their candidate as well.
Traders now await details of how the opposition Labour party reacts to the Prime Minister Theresa May’s victory of availing a Brexit deadline extension without having no plan on hand.
Off late, the Tory-Labour alliance has been struggling as the opposition leader Jeremy Corbyn slipped to domestic problems and is also sticking on the Irish border issue than PM May who wants to get ahead of everything so that her plan finally can pass through the British parliament.
Overall risk sentiment in the market, as portrayed by the US 10-year treasury yield, seems balanced as the gauge is almost unchanged near 2.47%.
In addition to Brexit drama, monthly Producer Price Index (PPI) and weekly initial jobless claims from the US will also be closely observed. Initial jobless claims may rise to 211K from 202K during the week ended on April 05. Further, no change is expected to take place in the 1.9% PPI (YoY) for March but the rise to +0.3% from +0.1% can happen if observing monthly format. Also, the PPI ex-food and energy may decline to 2.4% from 2.5% on the yearly footage whereas MoM figures may improve to +0.2% from +0.1% previous outcome.
GBP/USD Technical Analysis
Multiple highs around 1.3120/30 and four-week-old descending trend-line at 1.3155 could keep limiting the GBP/USD upside ahead of shifting market attention to 1.3180 and 1.3200.
For the sellers, the 1.3015 and 1.3000 can provide nearby support while 200-day simple moving average (SMA) figure of 1.2975 and 100-day SMA level of 1.2940 could become Bears’ favorites then after.
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
Editors’ Picks
EUR/USD holds steady at around 1.0850 ahead of Powell's testimony
EUR/USD started the week with a bearish gap as markets reacted to France election outcome. The pair, however, managed to find its footing and stabilized near 1.0850, with investors refraining from taking large positions ahead of Fed Chairman Powell's testimony on Tuesday.
GBP/USD climbs to multi-week highs near 1.2850
GBP/USD regained its traction and advanced to its highest level since mid-June above 1.2800. The US Dollar struggles to find demand as market focus shifts to Fed Chairman Powell's congressional testimony, allowing the pair to stretch higher.
Gold trims recent gains, holds above $2,350
After posting impressive gains on Friday, Gold stays under bearish pressure and falls toward $2,370 on Monday. Reports of China's Central Bank pausing Gold purchases for the second straight month in June weighs on XAU/USD.
Crypto Today: Bitcoin recovers even as German government BTC transfers continue, Ethereum and XRP looking up
Bitcoin trades above $57,000 on Monday even as investors remain fearful amid mounting pressure of German BTC transfers. Ethereum trades above the psychologically important $3,000 level as ETH traders anticipate Spot ETF approval by the SEC.
Five fundamentals for the week: Powell's powerful testimony, politics and inflation figures stand out Premium
How fast is the US economy slowing? That remains the question for investors, eager to see rate cuts – but fearful of recession. After Nonfarm Payrolls figures showed weakness on Friday, a response from the US central bank and inflation data is of interest.