Market Overview

GBP/USD Forecast: After Meeting 1.2850 Target, 1.2800 Is Next Amid Brexit Stalemate

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  • The UK Prime Minister’s spokesman said on Monday that there will be no meaningful vote on Brexit deal this week indicating persisting uncertainty to weigh on Sterling further.
  • The Bank of England Governor Mark Carney is due to speak about the economic outlook and global trade tensions, in London at 13:00 GMT.
  • Sterling dwells at the brink of 1.2850 targeting 1.2800 next.

The GBP/USD is sliding continuously lower this week to trade little changed on the downside just below 1.2850. The UK Prime Minister Theresa May rejected claims from the opposition Labor party for a UK-wide customs union with the EU that would ease the Brexit tension, especially at the Irish border and her spokesman said there will be no meaningful vote on Brexit deal this week. The persisting Brexit stalemate is weighing on Sterling that already reached the immediate target of 1.2850 on the downside and it is expectedly sliding further down towards 1.2800.

British media brought the story of the UK Prime Minister Theresa May quitting the job this summer in order to be able to prevent a long-standing enemy Boris Johnson from getting the top job.

The Bank of England Governor Mark Carney is scheduled to speak in London about the global trade tensions, but it is unlikely for Carney to come up with the different message from last week’s February Inflation report that lowered the growth forecast citing hard Brexit as a key economic risk to the outlook.

Technically the GBP/USD is moving within a corrective trend after breaking the psychologically important 1.3000 and 38.2% Fibonacci retracement line of 1.2970 last week.

The technical oscillators like the Relative Strength Index (RSI) and Slow Stochastics (SS) are both pointing lower with Slow Stochastics making a bearish crossover in the Overbought territory indicating future price declines. With the break below 1.2850, the GBP/USD is now targeting 1.28000 level representing a 50-DMA on a daily chart. On the upside, the 1.2900 and then 1.2970 are expected to hold as a resistance line.

GBP/USD daily chart

gbp_usd_daily-636855634681363630.png

Posted-In: BrexitGovernment News Eurozone Forex Global Markets General

 

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