- Rising odds of a hard Brexit are sending Pound bidders scurrying for cover.
- A mid-tier economic calendar for the week will have Greenback traders focusing on Friday’s US CPI reading.
The GBP/USD is trading into the bearish side as the new trading week begins to unwind, and traders are remaining on edge as Brexit concerns return to the forefront.
The Bank of England’s (BoE) Governor, Mark Carney, stepped up recently and voiced concerns over current Brexit conditions, stating that the ever-rising odds of a hard Brexit scenario are “uncomfortably high”, and UK ministers are warning that European Union leaders in Brussels are at risk of breaking their own laws if they continue to refuse to give up any negotiating ground while the UK seeks to secure trade agreements with the EU prior to the official Brexit date of March 2019.
After last week’s BoE action that saw the UK’s central bank disappoint markets with an anticipated pace of rate hikes that fell far short of expectations, this week sees a fairly muted schedule for the GBP, and broader markets will be turning their eyes to the US inflation figures due later this week, though Monday will be seeing the UK’s y/y BRC Like-For-Like Retail Sales for July, which is forecast to slow to 0.4% compared to the previous period’s 1.1%.
GBP/USD Technical analysis
With Brexit back on the front burner once again, the Sterling is facing bearish pressure back into 2018’s lows after July failed to generate a meaningful bounce for GBP buyers to latch onto; a continued decline will be seeing the GBP/USD sliding into the 1.29 technical barrier and beyond.
GBP/USD Chart, 15-Minute
| Spot rate: | 1.2986 |
| Relative change: | -0.09% |
| High: | 1.3010 |
| Low: | 1.2987 |
| Trend: | Bearish |
| Support 1: | 1.2974 (previous week low) |
| Support 2: | 1.2956 (2018 bottom) |
| Support 3: | 1.2900 (major technical level) |
| Resistance 1: | 1.3042 (Friday high) |
| Resistance 2: | 1.3096 (61.8% Fibo retracement level) |
| Resistance 3: | 1.3172 (previous week high) |
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