- Sterling gets a much-needed boost on Greenback weakness.
- Brexit remains at the forefront with little developments and plenty of warnings.
The GBP/USD is trading into 1.2950, bolstered by a step back by the US Dollar, but Brexit concerns and a dovish Bank of England (BoE) are hanging closely overhead.
Odds of a no-deal Brexit continue to rise, and traders are trepidatious about upcoming negotiations, which are set to continue this month with Prime Minister Theresa May at the helm of the UK’s side of trade talks.
The BoE has dedicated itself to a pace of rate hikes that is marginally slower and lower than markets were expecting, with interest rate increases relegated to a potentially annual occurrence. The BoE is also seeing fit to weigh in on Brexit, with bank members warning that a hard-Brexit could have profound short-term effects on the UK’s economy.
Friday will be bringing the UK’s latest round of GDP figures, but the week is seeing a thin calendar in the run-up to Friday’s figures, and market sentiment can expect to remain at the helm of the GBP/USD’s trading direction.
GBP/USD Technical Analysis
With the Pound bouncing on Greenback selling, and Brexit angst is mixing poorly with a Sterling that is already looking towards Friday’s GDP reading for the UK; with the pair into a fresh low for 2018 this week, buying power is looking incredibly thin as Daily candles show the GBP/USD steeply into bearish territory.
GBP/USD Chart, 15-Minute
| Spot rate: | 1.2948 |
| Relative change: | 0.08% |
| High: | 1.2959 |
| Low: | 1.2930 |
| Trend: | Sideways |
| Support 1: | 1.2919 (current week low; 2018 bottom) |
| Support 2: | 1.2900 (major technical level) |
| Support 3: | 1.2865 (S2 daily pivot) |
| Resistance 1: | 1.3010 (current week high) |
| Resistance 2: | 1.3075 (61.8% Fibo retracement level) |
| Resistance 3: | 1.3172 (previous week high) |
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