GBP/USD fails to hold daily gains, eases below 1.30 mark to turn flat on day
The GBP/USD pair, which touched its daily peak at 1.3020 during the European session, lost its traction to ease below the 1.30 handle in the NA session. As of writing, the pair is trading at 1.2970, a few pips below yesterday's closing level.
Although the US Dollar Index plummeted to its lowest level in 13 months below the 94 mark, the pair failed to take advantage of that situation. Investors don't see the cable as a good investment alternative against the greenback amid the uncertainty surrounding the outcome of Brexit negotiations. A recent poll conducted by Reuters showed that participants saw a 30% chance of Brexit talks ending with no deal and agreed that Brexit cancellation would be the best outcome from talks for the UK economy.
- US Dollar extends losses, hits new 13-month low below 94
Furthermore, weaker-than-expected macro data from the U.K. this week hurt the expectations of a hawkish BoE move, weighing on the cable. Despite the heavy USD sell-off witnessed throughout the week, the GBP/USD pair is marching towards a weekly close with a loss around 150 pips.
Technical outlook
A weekly close below the 1.30 mark could open the door for further losses in the near-term. 1.2930 (Fib. 23.6% retracement of 21 - 30 June rise) could be seen as the first target ahead of 1.2865 (50-DMA) and 1.2800 (100-DMA). On the upside, resistances are located at 1.3000 (psychological level), 1.3050 (Jul. 19 high) and 1.3125 (Jul. 18 high).
Brexit headlines
- Most likely outcome of Brexit talks is free trade agreement - Reuters poll
- UK Press: Free movement of people to continue for at least two years after Brexit - RTRS
- Japan’s Kishida: UK Foreign Secretary Johnson promised to minimize Brexit impact on corporate activity
- British Chambers of Commerce: Govt. needs to avoid abrupt departure from bloc