Yahoo Finance GBP/USD Daily Price Forecast – Brexit Woes Continue to Pressure GBP on Bear’s Path
The GBP/USD pair set off the week on a weaker note, consolidating last week’s rebound near the midpoint of the 1.27 handle, as the markets remain cautious heading into the releases of the first of a series of notices on how to deal with a hard Brexit later this week. The pound remains undermined by the looming Brexit uncertainty, as the UK government prepares for a no Brexit deal and especially in light of weekend’s report that the UK’s no Brexit deal planning will rely heavily “on the availability of existing labor” in the event that talks break down.Further, the GBP bulls take a back seat after the latest Institute of Directors (IOD) survey showed that the UK business leaders’ confidence in the economy fell to its lowest point this year on the back of the Brexit uncertainty. As of writing this article, GBPUSD pair is trading at 1.2732 down 0.15% on the day. For the week ahead investors are expected to approach the pair in neutral stance as Brexit proceedings could push the pair’s momentum either side.
Brexit Proceedings To Remain Main Focus of GBP Investors Across The Week
However, Cable’s downside may found some cushion amid the recent series of upbeat UK economic releases, with the inflation rate edging higher alongside a rebound in the Kingdom’s retail volumes. Meanwhile, the immediate focus now remains on the FOMC member Bostic’s speech for fresh US dollar trades, as developments around the US-China trade talks will continue to influence the buck ahead of the FOMC minutes. Global market today is expected to see muted momentum on all major pairs as risk-off sentiment seeped back in Asia amid renewed Australian political tensions and Brexit uncertainty. Meanwhile, the latest gunshots fired at the US embassy in Ankara also fueled risk-aversion further. As a result, the US dollar extended its gradual recovery across its main competitors. The UK government recently announced that it will be releasing a series of no-deal Brexit papers over the next few weeks, covering over 80 areas of UK life, to highlight the potential disruptions in the event of the UK leaving the EU without a withdrawal agreement. These papers are likely to see Brexit remain in the headlines, potentially weighing on the British Pound.
From technical perspective, the daily chart shows that the pair remains bearish and oversold, as the RSI indicator posted a modest upward correction, now heading higher at around 26, while the Momentum indicator holds directionless well into negative territory. In the 4 hours chart, the pair settled a few pips above a mild-bearish 20 SMA, while technical indicators entered the positive territory, the Momentum still heading higher and the RSI currently at around 52, rather reflecting the bounce from the low set at 1.2661 than suggesting further gains ahead. Expected support and resistance for the pair in near future are at 1.2700, 1.2665, 1.2620 and 1.2760, 1.2790, 1.2825 respectively.
This article was originally posted on FX Empire
