- Brexit fears are back on the table as over-the-weekend talks look set to have gone nowhere.
- An early week with few data points will see trade headlines in the fray.
The GBP/USD is finding some support at the 1.3100 technical level after getting knocked lower by the trading week’s opening bearish gap.
Over the weekend: Brexit back under a microscope as tempers flare
Investor confidence is souring once again as Brexit talks stall out once more, and pro-leavers within Prime Minister Theresa May’s own parliament are on the warpath again, looking to tear down what little progress PM May has managed to achieve in bitter talks with strong-handed European Union leaders in Brussels. After endless months of go-nowhere negotiations, PM May has been muscled into a position where she is looking to sneak a plan to keep the UK in the EU’s customs union under the radar, and Brexiteers in the UK remain staunch in their opposition to any sacrificial trade agreements.
the Cable staggered into 1.3080 at the market’s outset, slipping from last week’s close of 1.3150, though buyers look to have stepped in, keeping the GBP/USD restrained at the 1.3100 level for the time being, though the week ahead promises plenty of headlines-driven action.
Monday is a thin showing for the GBP on the economic calendar, which will allow US Retail Sales data due later at 12:30 GMT some extra play on the charts, where the m/m American Retail Sales excluding Autos is expected to remain steady at 0.3%, and Tuesday will be seeing the first iteration meaningful economic data from the UK with August’s Average Earnings figures, which are forecast to decline slightly as Brexit fears continue to take incrementally larger chunks out of the UK’s domestic economy.
GBP/USD levels to watch
This week’s opening downside gap erases last week’s gains, taking the Sterling back down from a peak of nearly 1.5280, and with Brexit hopes evaporating in the wind it’s looking unlikely that bidders will be able to keep the Cable from getting trapped by the 50-day EMA which currently rests at 1.3070, while the bearish-sloping 200-day moving average, camped out at 1.3490 sees the GBP/USD still in a bearish stance for 2018, with the current support floor priced in at early October’s swing low of 1.2920.
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