The GBP/USD pair is seen flirting with the 1.30 handle, as we progress towards the European trading, having stalled the overnight bounce near 1.3035 region, as attention now turns towards the crucial UK Cabinet meeting on the Brexit deal and inflation figures.
1. Technical Overview
The pair lost the 1.3000 level but holds on to daily gains and down for the week. The 4 hours chart shows that the price has been unable to clear the 200 EMA, while technical indicators have lost their upward strength after reaching their midlines, now gaining downward traction. The 20 SMA in the mentioned chart maintains is bearish slope below the larger one and above the current level. The pair would need to move beyond Friday's high at 1.3069 that stands now in the way for additional gains toward 1.3174, where the pair set a top last week. Fundamental headlines are largely overshadowing technical readings, yet given the sharp 100 pips' pullback from daily highs, seems it will take more than an optimistic headline to convince again bulls.
2. Fundamental Overview
The GBP/USD pair jumped to 1.3046, its highest for this week, as news hit the wires indicating that the UK and the EU have agreed on a Brexit deal, including a solution to the infamous Irish border issue. The document, still unknown by the market, is now at the disposal of UK Cabinet members ahead of a meeting that will take place this Wednesday at 14:00 GMT. Enthusiasm was cooled down just partially by comments from a DUP spokeswoman that said that there are unconcluded things. Nevertheless, the market is optimistic that a deal text has been agreed. If it passes the Cabinet, it will then have to pass the UK's Parliament, so there´s a long way ahead, but at least seems things are moving in the right direction. The UK released earlier today employment figures, mostly encouraging although they didn't reach the price, overshadowed by Brexit tensions. Nevertheless, average earnings rose at their highest rate in a decade, up by 3.2% excluding bonus in the three months to September, while the ILO unemployment rate for the same period was up to 4.1% vs. the previous and expected 4.0%. UK's October inflation will be out this Wednesday, seen up 0.2% MoM and 2.5% YoY.
1. Technical Overview
The pair lost the 1.3000 level but holds on to daily gains and down for the week. The 4 hours chart shows that the price has been unable to clear the 200 EMA, while technical indicators have lost their upward strength after reaching their midlines, now gaining downward traction. The 20 SMA in the mentioned chart maintains is bearish slope below the larger one and above the current level. The pair would need to move beyond Friday's high at 1.3069 that stands now in the way for additional gains toward 1.3174, where the pair set a top last week. Fundamental headlines are largely overshadowing technical readings, yet given the sharp 100 pips' pullback from daily highs, seems it will take more than an optimistic headline to convince again bulls.
2. Fundamental Overview
The GBP/USD pair jumped to 1.3046, its highest for this week, as news hit the wires indicating that the UK and the EU have agreed on a Brexit deal, including a solution to the infamous Irish border issue. The document, still unknown by the market, is now at the disposal of UK Cabinet members ahead of a meeting that will take place this Wednesday at 14:00 GMT. Enthusiasm was cooled down just partially by comments from a DUP spokeswoman that said that there are unconcluded things. Nevertheless, the market is optimistic that a deal text has been agreed. If it passes the Cabinet, it will then have to pass the UK's Parliament, so there´s a long way ahead, but at least seems things are moving in the right direction. The UK released earlier today employment figures, mostly encouraging although they didn't reach the price, overshadowed by Brexit tensions. Nevertheless, average earnings rose at their highest rate in a decade, up by 3.2% excluding bonus in the three months to September, while the ILO unemployment rate for the same period was up to 4.1% vs. the previous and expected 4.0%. UK's October inflation will be out this Wednesday, seen up 0.2% MoM and 2.5% YoY.