GBP PRICE, NEWS AND ANALYSIS:
- The proposed Brexit agreement between UK PM Theresa May and the EU is facing strong political opposition all round in the UK.
- That means the likely next move in the GBPUSD price is lower still as she struggles to win approval for it.
GBP PRICE AT RISK
GBPUSD is dropping further below 1.30 in Europe Thursday after a highly volatile session Wednesday as traders weighed up the impact of the proposed Brexit deal between UK Prime Minister Theresa May and the EU. Moreover, it could well come under more downward pressure in the days ahead as opposition to the agreement dents confidence in the Pound.
May is due to make a statement on the agreement in Parliament Thursday ahead of a likely EU Summit later this month, perhaps on November 25, but she faces a series of hurdles and a stumble at any one of them could lead to more GBP weakness.
GBPUSD PRICE CHART, DAILY TIMEFRAME (JULY 1 – NOVEMBER 15, 2018)
In particular, the deal has to be ratified by the UK Parliament and that looks currently to be very difficult to achieve amid hostility from the opposition Labour Party and from Northern Ireland’s Democratic Unionist Party that holds the balance of power in Parliament.
May also faces dissent from both the hardline supporters of Brexit and those wishing to remain in the EU within her own ruling Conservative Party. Despite winning the approval of her cabinet for the potential agreement, the Brexit Secretary Dominic Raab and a junior minister in the government resigned early Thursday and more resignations are possible.
May could also face a no-confidence vote in Parliament as Brexit hardliners gather signatures for a challenge to her authority that could ultimately lead to her downfall.
GBPUSD PRICE CHART, FIVE-MINUTE TIMEFRAME (NOVEMBER 14-15, 2018)
For now, a possible first target is Wednesday’s 1.2881 low and a drop below support there would likely lead to more losses near-term.
Source: https://www.dailyfx.com/forex/market_al ... ition.html
- Thin Friday markets await further details on the newest round of Brexit agreements being promised by UK PM May.
- Monday's upcoming Brexit summit and EU vote on the deal will be capturing significant attention in the run-up.
The GBP/USD is bumping into the 1.2880 region after Thursday's mid-day announcement of a flurry of Brexit deals saw the Cable surging over 1.2% into a new weekly high of 1.2927 before bedding back down just shy of the 1.2900 major technical level.
Friday's economic calendar remains free and clear of UK data on the offering, but Brexit headlines would have rendered any data largely irrelevant anyway, after UK sentiment pinned firmly into the optimistic end of the spectrum yesterday following several leaks surrounding the EU-UK's latest 'agreement to have an agreement', wrapped up in a new Brexit agreement that remains to be agreed to. Spain remains a tricky thorn in the side of both parties, threatening to overturn the newest agreement when it gets voted on at the EU-UK Brexit summit on Monday unless sufficient 'clarity' on Gibraltar's borders are included in the text of the agreement. Following that, the new raft of Brexit agreements, which waits to be completed this weekend, will need to survive a vote within the UK's own parliament, which is summarily stacked with Eurosceptic Brexiteers who continue to threaten to veto any agreement tabled by Prime Minister Theresa May, leaving significant headwinds on the path to a clean Brexit.
GBP/USD Levels to watch
Despite obvious pitfalls looming ahead, Brexit optimism has left the Pound in an elevated chart position, but even that sees itself teetering on the brink, as noted by FXStreet's own Valeria Bednarik: "according to technical readings in the 4 hours chart, as the rally stalled well below a mild bearish 200 EMA, although above a directionless 20 SMA, while technical indicators entered positive ground before losing directional strength. Given the Brexit situation, the upward potential for the Pound is quite limited, with spikes being taking as selling opportunities by speculative interest."
Support levels: 1.2840 1.2800 1.2765
Resistance levels: 1.2890 1.2930 1.2965
- The latest leg of a sudden pickup lacked any catalyst and quickly ran out of steam.
- Persistent Brexit uncertainties continue to dent sentiment surrounding the GBP.
- A modest USD uptick further collaborated towards capping any meaningful up-move.
The GBP/USD pair faded a knee-jerk spike to levels beyond the 1.2800 handle and quickly retreated to the lower end of its daily trading range.
After consolidating in a range through the Asian/early European session, the pair picked up the pace in the last hour and jumped an intraday high level of 1.2810.
The up-move lacked any obvious catalyst but coincided with the news that the UK trade secretary Liam Fox has urged MPs to vote for Theresa May’s controversial EU withdrawal plan.
However, investors seemed convinced that the UK PM Theresa May will fail to get the Brexit deal past parliament, which eventually kept a lid on any runaway rally for the British Pound.
The pair has now retreated back to the 1.2780 region, the lower end of its daily trading range, and was further weighed down by a modest US Dollar uptick, which remained supported by Thursday's FOMC meeting minutes.
The latest FOMC meeting minutes reaffirmed prospects for another rate hike in December and largely offset Wednesday's dovish sounding comments by the Fed Chair Jerome Powell and eventually extended some support to the greenback.
In absence of any major market moving economic releases from the UK, the incoming Brexit-related headlines might continue to drive sentiment surrounding the British Pound and infuse some volatility around the major.
Later during the early North-American session, a scheduled speech by New York Fed President John Williams and the release of Chicago PMI might also help traders grab some short-term opportunities on the last trading day of the week.
Technical levels to watch
Immediate support is pegged near the 1.2760 zone and is followed by the 1.2725 level, below which the pair is likely to break through the 1.2700 handle retest yearly lows, around the 1.2665-60 region. On the flip side, any attempted move back above the 1.2800 handle now seems to confront resistance near the 1.2825 region, which is closely followed overnight swing highs, around mid-1.2800s.
Source: https://www.fxstreet.com/news/gbp-usd-f ... 1811300950
Lows from 2018 stall the early fall
The GBPUSD fell in the Asia-Pacific session and in doing so approached the lows for 2018 at 1.26612 (from August) and yesterday (at 1.2658). The low today reached 1.2670.
The holding above those lows suggested buyers were leaning against the lows. They won. The sellers turned to buyers. The price started to move back higher.
Technically, the rise took the price back above the some swing levels at 1.2747-53, the 100 hour MA (blue line) and the 200 hour MA (green line ) on the move to the 50% midpoint of the range since November 22 at 1.2792. The high reached 1.27965 (just below 1.2800).
We trade between the 100 and 200 hour MAs at 1.27514 and 1.27745. The hourly bars above the 200 hour MA have not been able to muster a close above the level. A trade might be to lean against the upper MA. You would hoping for a break below the 100 hour MA (and 1.27474 level).
The story in the GBPUSD is mostly focused on the Brexit vote on December 11. The horses will jockey for position. The traders will likely lean against lows and highs. Yesterday, the pair stopped near trend lines at the highs. Today and yesterday, the price stalled at year lows.
It can be a crap shot on where the levels are but if you see levels that make sense to you, they likely mean something to other traders as well. If you believe that traders lean to define and limit risk and "risk a little to make more than a little", you may "make more than a little" on your trades.
Source: https://www.forexlive.com/technical-ana ... e-20181205
- PM May's refusal to submit her Withdrawal Proposal to the UK parliament yesterday will see plenty of Brexit rhetoric in the headlines today.
- Earnings data is on the docket, but soft economic readings for the UK lately could see the Cable in a weakened position once again.
GBP/USD is currently grinding its way back above 1.2580 following Monday's decline from the 1.2770 region, fueled by the news that Prime Minister Theresa May would pulling her Brexit Withdrawal Proposal from the parliamentary vote that was slated for today in the UK's House of Commons, and the Cable heads into Tuesday that promises plenty of talking heads delivering a barrage of Brexit-focused headlines, as well as plenty of high-impact data on the offering.
With Tuesday's Brexit deal vote now canceled by PM May, who pulled the proposal off of the table after it became clear that her divorce bill had no hope of passing in the UK parliamentary vote, the focus will now be on what the next steps of Brexit will be as May heads back to Brussels in a bid to secure further concessions from European Union leaders, who have so far given very little middle ground.
Key UK data will be dropping early in the London market session, with Average Earnings, ILO Unemployment, and Claimant Counts all dropping at 09:30 GMT. Average Earning (excluding bonuses) for the 3rd quarter are expected to hold steady at 3.2%, alongside the ILO Unemployment Rate, which is forecast to remain at 4.1%, while the Claimant Count Change from October was seen at 20.2 thousand, but the key reading for the day will be earnings, and a flubbed release could easily see the Cable take another header below 1.2500.
GBP/USD Levels to watch
The Sterling's corrective bounce following PM May's withdrawal of her divorce bill sees limited upside, and as FXStreet's own Valeria Bednarik noted, shortside interest remains strong:
"The GBP/USD pair bounced from the mentioned low but just in corrective mode after hitting 1.25, and by no means changing the negative technical stance. Having spent the second half of the last week struggling with a daily descendant trend line, it finally fell below it, now trading over 100 pips from it. In the 4 hours chart, a bearish 20 SMA converges with the mentioned trend line, as technical indicators maintain their downward slopes around oversold readings, signaling strong selling interest. The next big support, should the 1.2500 figure gets broken, is the 1.2330/5 price zone, where the pair has multiple weekly lows and highs back from 2016 and 2017. "
Support levels: 1.2500 1.2465 1.2430
Resistance levels: 1.2590 1.2640 1.2675
Source: https://www.fxstreet.com/news/gbp-usd-t ... 1812110459
The uncertainty in UK politics surrounding Brexit is enormous. Often with events, uncertainty comes into a binary pattern of potential events. However, with Brexit, there is such an array of potential scenarios that could play out that it is almost impossible to predict. What happens in situations of such significant uncertainty? Sell now and figure it all out later. UK Gilt yields falling sharply are not helping the pound either. This seems to be the path for sterling right now. The end result determines the means, right? Well, in this instance, it may not be the case, as Theresa May has succumbed to domestic pressure surrounding the seemingly unacceptable elements of the Withdrawal Agreement deal with the EU-27 (i.e. she cannot be the deal voted through on the current numbers). So she will go back to the EU and try to extract more concessions from the EU. It would be quite something if this proves to be successful in any substantive way, but this is likely to be a futile attempt. Cue analogies of cans being kicked down the road. Whilst this happens, today’s “meaningful vote” has been postponed and the UK remains in limbo/purgatory over the true outcome on Brexit. The volatility on sterling shows no sign of letting up.
Read more: https://www.hantecfx.com/sterling-press ... -the-road/
During Tuesday’s trading session, the currency exchange rate was resisted by the 55-hour SMA to pass through the support levels of the monthly S1 and the weekly S2 . During Wednesday’s morning hours, the British Pound was located between the weekly S2 and the weekly S3 to trade at the 1.2537 mark.
In regards to the near-term future, most likely, the currency exchange rate will break the resistance of the 55-hour SMA to use the technical indicator as a support level to break through the monthly S2 at 1.2565 to trade near the 1.2555 level.
On the other side, the rate could be resisted by the 55-hour simple moving average to push the British pound to pass through the support level of the monthly S2 at 1.2435 to trade at the 1.2400 level during the trading session on Wednesday.
Source: https://money.net & https://www.actionforex.com/contributor ... -sideways/
Intraday action on GBP/USD remains underpinned by soft support from the 1.2600-12615 zone, and swings higher continue to fail to develop meaningful momentum as the Sterling continues to be cowed by Brexit headlines.
The past two weeks have seen the Cable break near-term consolidation to mark in a new 20-month low at 1.2477, and the bullish recovery saw stiff new resistance priced in at the previous support level of 1.2670.
The past two months sees the GBP/USD pairing stuck in a bearish cycle, accelerating out of the regular selling zone, and the bullish bounceback has seen the Cable return to a nominally bearish cycle as bidders get pushed back into the overarching bear-trend.
Today Last Price: 1.2628
Today Daily change: -37 pips
Today Daily change %: -0.292%
Today Daily Open: 1.2665
Previous Daily SMA20: 1.2746
Previous Daily SMA50: 1.29
Previous Daily SMA100: 1.2937
Previous Daily SMA200: 1.3263
Previous Daily High: 1.2688
Previous Daily Low: 1.2593
Previous Weekly High: 1.284
Previous Weekly Low: 1.2659
Previous Monthly High: 1.3176
Previous Monthly Low: 1.2723
Previous Daily Fibonacci 38.2%: 1.2629
Previous Daily Fibonacci 61.8%: 1.2651
Previous Daily Pivot Point S1: 1.2609
Previous Daily Pivot Point S2: 1.2554
Previous Daily Pivot Point S3: 1.2515
Previous Daily Pivot Point R1: 1.2704
Previous Daily Pivot Point R2: 1.2743
Previous Daily Pivot Point R3: 1.2798
Sources: https://Money.net & https://www.fxstreet.com/news/gbp-usd-t ... 1812140637