Sterling struggles to nurse wounds

30 July, 2019

The past few days have offered investors a bitter appetizer on what to expect in the months ahead after Boris Johnson became the new UK Prime Minister.

A severely depressed and unloved British Pound, disagreements with Brussels and chronic uncertainty over Brexit are positioned to be key themes shrouding the UK economy this quarter. Intensifying fears of a no-deal Brexit under Johnson’s leadership are already being reflected in Sterling which is weakening against every single G10 currency today.

Michael Gove’s comments over the weekend on how the government is “operating on the assumption” that the UK will leave the European Union has certainly not helped matters for the battered Pound. With uncertainty over Brexit set to mount ahead of the October 31 deadline, the Pound is fundamentally bearish.

The GBPUSD has already tumbled to a fresh 28 month low below 1.2150 this morning, and has scope to test 1.2000 if a solid daily close below 1.2100 is achieved.

Dollar stands tall ahead of Fed meeting


The Dollar jumped to a fresh two-month high against a basket of major currencies this morning ahead of the Federal Reserve rate decision on Wednesday.

With markets pricing in a 79% probability of a 25-basis point cut, attention will be directed towards the dot-plot and Jerome Powell’s press conference for fresh clues on when the Fed will cut rates again. Should the central bank sound less dovish than expected, expectations will most likely mount over the Federal Reserve holding off on further rate cuts beyond July. Although this will provide the Dollar with a welcome boost, the same cannot be said for global equity markets which have pushed higher on speculation over the Federal Reserve easing monetary policy.

The Dollar Index (DXY) has the potential to challenge 98.50 if an intraday breakout above 98.20 is secured.

Commodity spotlight – Gold


Where Gold concludes this week will be influenced by US-China trade talks in Shanghai, the Federal Reserve meeting on Wednesday and most importantly, the US jobs report on Friday.

Gold will find itself under pressure if the Federal Reserve is less dovish than expected and US jobs data on Friday dishes out an upside surprise. With anything on the table, the precious metal may remain rangebound until a catalyst is triggered. Focusing on the technical picture, prices are trading around $1425 as of writing. An intraday breakout above $1430 should encourage a move towards $1450.


Source   Presented by FXTM
GBP/USD has one more resistance line

GBP/USD is trading in the mid 1.28s after Nigel Farage's Brexit Party boosted Prime Minister Boris Johnson's chances of winning. How high can cable climb?

Pound tumbles as Johnson seeks December 12 Election

Sterling fell out of favour with investors on Thursday after U.K Prime Minister Boris Johnson called for a general election on...

Pound's pullback creates buying opportunity

The British pound rally over the last week came to an abrupt end after a mixed day in the British parliament yesterday which still left many questions...


Pound shoots higher despite Brexit drama

The British Pound was in high demand on Monday despite UK lawmakers delaying a crucial Brexit vote over the weekend. Markets...

GBPUSD headed for 1.30 after UK

The Pound soared towards the 1.30 level against the US Dollar, after UK Prime Minister Boris Johnson and European Commission President...

Pound steady as Brexit negotiators race to meet deadline

The Pound is gaining against the US Dollar, amid reports that Brexit negotiators are rushing to try and meet a midnight...


Sterling Rises on Brexit Plan Release

A sea of red in US stocks yesterday after the US reported weak PMI data. The Dow Jones Industrial Average declined by 343 points while the Nasdaq...

GBP/USD pair fell by more than 1.2%

Yesterday, the GBP/USD pair fell by more than 1.2% amid Brexit uncertainty. The chances of next UK elections grow, so the bilateral agreement will...

UK Supreme Court rules parliament shutdown unlawful

Boris Johnson was dealt a heavy blow on Tuesday after the Supreme Court ruled his suspension of Parliament "unlawful, void and to no effect".