- Brexit/political uncertainties exert downside on the GBP/USD pair.
- Backbenchers vote to block no-deal Brexit will be the key to watch today.
- UK PM announced a snap election on October 14 if he fails to win in the Parliament.
With no Brexit solution in sight, GBP/USD remains under pressure ahead of the much-awaited resumption of the British Parliament. The quote seesaws near 1.2030 while heading into the London open on Tuesday.
In addition to the early-day headlines suggesting the Brexit negotiator’s dislike for the EU’s refrain from altering Irish backstop, as conveyed by the BBC and the UK Telegraph, the Cable bears the burden of overall US Dollar (USD) strength as the US traders will return to their desks after an extended weekend.
Ever since the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson announced to prorogue the parliament, British politicians raged in anger indicating it as a clear sign of a no-deal Brexit. Due to this, an alliance formed by Labour, Liberal Democrats and other opposition parties as well as some Tory rebels will put forward a motion to win over the Commons’ support for a bill that would require the PM to seek Brexit extension till January 31 if he fails to get a deal with the EU before October 19. Another aspect of the bill, as conveyed by the Independent, says that the PM Johnson must seek another Brexit date from the EU in a case the bloc rejects 31 January deadline unless the Commons rejects it.
In a reaction to this, the UK PM has already threatened to call a snap election on October 14, the motion on which will be passed for a vote on Wednesday, if he fails in today’s crunch vote.
Hence, an enormous amount of political drama awaits the UK’s Parliamentary open after a long summer recess.
Other than the politics, UK’s August month Construction Purchasing Managers’ Index (PMI), 45.9 expected versus 45.3, will also gain the Cable traders’ attention.
On the contrary, headlines concerning the US-China trade stalemate and manufacturing PMIs from the US will also welcome the US traders’ after an extended weekend.
Technical Analysis
With the clear break of immediate support-line and sustained trading below four-month-old falling trend-line, the GBP/USD pair is likely to aim for 1.2000 round-figure with the August month low of 1.2015 be the close support. In a case prices keep trading southwards below 1.2000, the year 2017 low near 1.1987 and the year 2016 low near 1.1800 will be in the bears’ radar. Meanwhile, 1.2100 and 21-day simple moving average (DMA) near 1.2144 act as nearby resistances for the pair traders to watch during pair’s U-turn.
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
Gold picks up pace and flirts with $3,330, all-time peaks
Gold now gathers extra steam and advances to the $3,330 region per troy ounce, reaching an all-time high. Ongoing worries over escalating US-China trade tensions and a softer US Dollar continue to underpin demand for the metal ahead of Powell's speech.
EUR/USD gathers traction and approaches 1.1400 ahead of Powell
EUR/USD remains well bid and approaches the key 1.1400 milestone, bolstered by a renewed bearish sentiment in the Greenback prior to Fed Chairman Powell’s remarks on the US economic outlook.
GBP/USD clings to daily gains near 1.3250
Despite the marked pullback in the US Dollar, GBP/USD now trims part of its earlier advance to the vicinity of 1.3300 the figure, or multi-month highs, as investors digest easing inflationary pressures in the UK ahead of Powell’s speech.
Bitcoin stabilizes around $83,000 as China opens trade talks with President Trump’s administration
Bitcoin price stabilizes around $83,500 on Wednesday after facing multiple rejections around the 200-day EMA. Bloomberg reports that China is open to trade talks with President Trump’s administration.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.