GBP Analysis and Talking Points
- GBPUSD Remains Pressured by UK Politics
- GBP Technical Analysis | Trendline Support Broken
See the DailyFXQ2 FX forecast to learn what will drive the currency throughout the quarter.
GBPUSD Remains Pressured by UK Politics
UK politics continues to dictate price action in the Pound and with cross party talks between the government and the labour showing little in the way of progress, gains the pound have been faded with GBPUSD breaking 1.29 on the downside. As such, markets have grown more and more pessimistic that an agreement will be reached by the two parties, thus, failure to do so could see GBPUSD at 3-month lows. Alongside this, Theresa May announced that the withdrawal agreement will be brought back to parliament on the first week of June. However, unless there are notable changes with the support from the Labour it is likely to be rejected yet again. In turn, another failure could see Theresa May resign, however, the next move will depend on who is the next PM, whereby a firmer Brexiteer risks placing renewed pressure on GBP, consequently sparking a move towards 1.2780.
GBP Technical Analysis | Trendline Support Broken
As GBPUSD remains below the 200DMA, the outlook continues to shift towards further downside. The pair also made a break below trendline support, alongside the 23.6% Fibonacci retracement at 1.2890, which in turn raises scope for a test of the April low at 1.2865. A close below this could see losses extend further with the February low (1.2770) in focus.
GBPUSD PRICE CHART: Daily Time Frame (Mar 2018 – May 2019)
Chart by IG
DailyFX Analyst Pick
EURGBP Price Outlook – Rally Running Out of Momentumby Nick Cawley, Market Analyst
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