The GBPUSD pair was the only major currency to gain against the dollar on Tuesday, at of the end of the European session post GBP/USD share decline on Monday after news that two ministers resigned because of Prime Minister Theresa May’s Brexit plans. However this recovery momentum was lost after UK’s macro data for the day came out worse than expected. The GBP/USD is cycling around 1.316/1.311 through the week’s action over renewed trade fears as the pair was already stagnating over Brexit related political issues. The five key members of the UK’s parliament resigned from their posts within the UK’s Brexit department at the outset of the trading week, decrying Prime Minister Theresa May’s latest “third option” Brexit proposal, an agreement made at the last Exchequers meeting that the UK’s Boris Johnson called a betrayal of the original Brexit referendum results, before formally handing in his resignation as the UK’s Foreign Secretary.
GBPUSD Under Pressure
Britain’s Brexit Minister David Davis also resigned from his position, along with three other members of the parliamentary Brexit team. Tariff headlines for Wednesday have seen broader market sentiment swing to the downside as the US prepares to bring further tariffs to bear on China, targeting a further $200 billion USD in Chinese goods after Friday’s round-turn set of tariffs by each country saw both sides refusing to back down from their brewing trade war. Wednesday has a thin schedule set for the GBP, with only the NEISR GDP Estimate for the three months into June expected at some point through the day, and forecast at 0.3% (last 0.2%), with June’s RICS Housing Price Balance due late in the day at 23:01 GMT, and forecast at -2% versus the previous reading of -3%.
The 4 hours chart for the pair presents a neutral to negative stance trading around a flat 20 SMA. In the same chart, technical indicators turned lower, but now lacking directional strength and within neutral levels. The pair has an immediate support around 1.3120, where it bottomed several times during the last few hours, with a break below it, increasing chances for a bearish extension later today. Expected support and resistance for the pair are at 1.3120 / 1.3110 and 1.3415 / 1.3155 respectively.
This article was originally posted on FX Empire
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