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  • GBP/USD stays offered around the intraday low of 1.3237.
  • UK PM Johnson threatens EU to walk out with any deal, Brexit negotiator David Frost said, “We won’t blink first”.
  • Chatters surrounding the UK government’s legislation also add to trade talks pessimism, EU leaders feel irritated but await clarification.
  • US markets are off today, risk catalysts to keep weighing on the Cable.

GBP/USD drops to 1.3239, down 0.30% on a day, while heading into the London open on Monday. The Cable remains on the back foot since the day’s start as fears of a no-deal Brexit gains momentum. Also negatively affecting the pair could be the US dollar’s sustained run-up and a lack of major data/events up for publishing on the calendar.

October 15 is the deadline…

UK PM Boris Johnson loaded his salvo of warnings to the European Union (EU) while sayinh, “if no deal reached by October 15 with the EU, both sides should accept that and move.”

The comments followed British negotiator David Frost’s statements, as per the Mail on Sunday, signaling that the present government is different from what Theresa May used to lead and hence they won’t blink first, as far as the Brexit talks with the EU are concerned.

While the BBC’s Katya Adler cited the bloc leaders’ dislike for the UK’s latest developments, they’re waiting for the details to respond. It should also be noted that the Financial Times (FT) said that the British Government is planning new legislation that will override key parts of the Brexit withdrawal agreement, risking collapse of trade negotiations with Brussels.

Although the Brexit woes have played their role to weigh on the market’s trading sentiment, off in the US and a light calendar elsewhere, except from China’s trade numbers, failed to entertain the traders. Even so, the Sino-American tussle escalates as the Trump administration blacklists China’s SMIC.

Against this backdrop, stocks in Asia-Pacific print mild losses whereas the S&P 500 Futures also decline 0.27% by the press time.

Trades may now keep eyes on the wires connected from the EU while forecasting near-term GBP/USD moves amid the US holiday. Though, the UK’s Halifax House Price Index for August may offer intermediate trading opportunities.

Technical analysis

the Cable disrespects Friday’s Doji candle, suggesting a reversal of the previous bearish move, while also trading near the short-term support line, at 1.3245 now, backed by the bearish MACD signals. However, 21-day SMA and a two-month-old rising trend line, respectively around 1.3185 and 1.3140 can question the sellers afterward.

 

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