The GBP/USD opened for the week on downtrend movement and continued to decline across Monday’s trading session as British Pound which was already bearish was further pressured by bearish macro data release on Monday. Early Tuesday’s trading session saw the pair trading down testing 1.335 handle and is expected to continue move bearish on London market hours as US dollar grows strong over positive updates from N.Korean-U.S. summit. The Sterling tapped into a new low this week as the pair’s recovery to 1.3471 appears to be over, and the GBP/USD is shifting lower in sharp jolts as sentiment over Brexit developments continue to sour, with the UK’s Prime Minister, Theresa May, locked in a grim battle between hard-line Brexiteers and EU leadership in Brussels.
GBPUSD Still Chops Around
This week sees a rash of key voting items over Brexit in the UK’s parliament, and depending on how the voting goes, PM May could see an even longer fall down the Brexit hole with the British parliament set to force itself into the negotiation process. The strong bid-tone seen in sterling last week, where buyers rallied price to 1.3471, has so far failed to emerge again, as traders remain cautious ahead of the high-impacting economic releases and today’s Brexit vote in the House of Commons, where UK parliament will vote on the European Union Withdrawal Bill. On release front, Industrial and Manufacturing Production data and Trade balance data which were released on UK were all dovish which greatly pressured British Pound.
Investors are currently focusing on U.S. and North Korean Summit’s press meet scheduled at 4PM EDT where brief details on Trump & Kim’s talks would be provided. Earlier in the day Trump commented that the talks went far better than expected and N.Korea will begin denuclearization soon and this has caused US Greenback to see huge uptrend momentum. Traders also focus on Average Earnings Index +Bonus (Apr), Claimant Count Change (May) & Unemployment rate data in UK’s market hours and Core CPI data in US market hours. UK’s macro data is expected to be dovish during today’s session and this could add further bearish pressure to British Pound. Expected support and resistance for the pair are at 1.3344 / 1.3294 / 1.3204 and 1.3441 / 1.3471 / 1.3503 respectively.
This article was originally posted on FX Empire
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