- GBP/USD holding offer the bears but struggles below key resistance.
- Brexit keeps the bulls at bay and US stimulus hopes pressure the greenback.
GBP/USD is currently trading at 1.2885 and between a range of 1.2819 and 1.2978 on the day.
Brexit remains in focus and GBP has weakened on suggestions the latest round in negotiations has hit a snag.
The EU has begun legal proceedings against the UK after the Kingdom's PM, Boris Johnson, outlined plans to breach the terms of its Brexit divorce deal with the EU and therefore break international law.
''We had anticipated a souring of the week’s earlier tone and think GBP should continue to lag its peers near-term. Further out, however, we think sterling has a lot of bad news in the price and wonder if downside risks for cable of a No Deal outcome are starting to diminish,'' analysts at TD Securities explained.
The UK has one month to respond to the legal challenge while the negotiations continue.
''The decision by the UK to ignore international law sets a dangerous precedent, adding uncertainty to not only Brexit but also global stability. It undermines the power of the WTO,'' analysts at ANZ bank explained.
However, both sides say a deal is in sight despite that they are struggling to reach an agreement on some key issues.
One of the major issues is around the UK's ability to use state aid in order to prop up British businesses. The EU says this could give British companies an unfair advantage over EU companies. Disputes over fishing rights and governance are also preventing headway.
Meanwhile, the US dollar was pressured to a low in the 93.50s as measured by the DXY index as investors juggled hopeful and pessimistic news on the progress of stimulus talks Washington amid signs of waning momentum of economic recovery from the pandemic recession, now entering its ninth month.
GBP/USD levels
If there is a continuation of accumulation at support, then the case will remain bullish.
However, a break of the structure opens downside risks.
The US dollar, on the other hand, could be on the verge of a comeback:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.