GBP/USD is stabilising on the 1.32 handle after meeting a recent low of 1.3200 on broad dollar strength during late North American market hours yesterday. Currently, GBP/USD is trading at 1.3214 after falling from yesterday’s high of 1.3285. The pair is expected to remain above 1.3200’s during today’s London market hours. Broader market sentiment has been trying to recover following the announcement of further US-China tariffs, with the Trump administration targeting another $200 billion in Chinese imports. The tariffs are expected to come into effect sometime after the eight-week public commenting period, but the GBP/USD continues to push into lows as Brexit concerns drag the Sterling down.
Pound Steadies Itself
Investors are waiting to see the UK’s latest White Paper on Brexit, which will unveil the full details of Prime Minister Theresa May’s latest “third option” Brexit proposal, which saw close support in an Exchequers vote. PM May’s latest proposal has left hard-line Brexiteers within the parliament deeply unsatisfied, and five key members of the UK’s Brexit department have resigned from their posts in protest, with the UK’s Brexit pioneer Boris Johnson calling the proposal a betrayal of the original Brexit referendum’s results. PM May is seeking to keep both sides of the ongoing Brexit negotiations happy with her latest proposals, which see the UK attempting to remain in key EU trade agreements in exchange for remaining under specific EU jurisdictions, a play that is unlikely to receive much support from those who left and members who remain or EU leaders themselves.
For Thursday’s economic calendar, the UK sees another quiet session, with only the Bank of England’s (BoE) Credit Conditions Survey, due at 08:30 GMT, but the following US session will be seeing US core CPI figures at 12:30 GMT, which markets are expecting to tick upwards to 2.3%, a minor shift higher compared to the previous reading of 2.2%. US Dollar lost momentum during Asian market hours over news of US President Trump’s arguments during first day of Two-day NATO members meet in Brussels due to Trump treating the defence meet as a place to force trade related negotiations and blaming allied countries on their part to play in NATO such as lack of Financial contribution. The technical picture favours another leg lower for the pair, as in the 4 hours chart, it has remained capped by the 20 SMA. Expected support and resistance for the pair are at 1.3190 / 1.3155 / 1.3110 and 1.3245 / 1.3285 / 1.3320 respectively.
This article was originally posted on FX Empire
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