Market Overview

GBP/USD Forecast: No News Is Good News For Sterling

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  • The GBP/USD is enjoying a calm day to extend its gains.
  • A no-deal Brexit worries markets but the lack of news helps the recovery.
  • The pair is riding on uptrend support, but bears can still have their say.

The GBP/USD is trading around 1.2760, around 100 pips from the 2018 low of 1.2662 recorded last week. The US Dollar, sought after in times of trouble is in retreat. The Turkish crisis has not been fully resolved, but the steps taken by the central bank and help from Qatar help. 

More importantly, China and the US are now talking about trade. The world's largest economies were at loggerheads over tariffs, with the US threat of imposing duties on $200 billion worth of Chinese goods being the primary scare. The news that both countries will try and sort things out and move towards a deal by November helps sooth markets. 

On the other side of the pond, the Pound enjoys no news about Brexit. While negotiations have resumed, there have been no significant developments or headlines. There are reports about a potential formation of a new party to oppose Brexit. Also, pro-EU Labour peer and former cabinet minister Andrew Adonis called the party to oppose Brexit. These developments slightly help Sterling.

Fears about a no-deal Brexit dominated the headlines of late, with preparations such as stockpiling being made. The absence of substantial news from the negotiations and no warnings of a "no-deal" serve as support for Sterling.

A light economic calendar sees a speech from the Fed member Raphael Bostic as the single noteworthy event. Last week's UK data was mixed and did not rock the boat.

GBP/USD Technical Analysis

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Cable is trading alongside uptrend support that begins from the latest August 15th low of 1.2662. So far, there were no dips below this level. The Relative Strength Index is above 50 and Momentum is positive. However, the pair struggles with the 50 Simple Moving Average on the four-hour chart.

Initial support awaits at 1.2720 which is a low point from August 10th. Further down, the new 2018 trough at 1.2662 expects the pair. The round number of 1.2600 is next.

On the upside, we find 1.2825 which was the swing high on August 14th, followed by 1.2920, a separator of ranges in early August. 1.2980 capped the pair early in the month and defended 1.3000. 

Posted-In: FXStreetNews Eurozone Forex Markets

 

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