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GBP/USD Daily Price Forecast – Bears Start To Cover The British Pound Amid Flextension

By:
Nikhil Khandelwal
Published: Apr 5, 2019, 09:01 UTC

The cable had a decent upward in the Asian trading session which reversed at 1.3119 level. May and Corbyn set to continue talks today.

GBPUSD

After the previous day’s downward rally, things seem to normalize for the GBP/USD on the Friday trading session. The Cable started the day at 1.3072 level and created a fresh high for the day near 1.3120 levels. However, there is no such colossal upliftment or complete recovery in the previous losses observed in the pair until 07:20 GMT.

At the time of writing this article (08:33 GMT), the pair was trading at 1.3090 level.

Brexit Updates

As a follow up of UK PM Theresa May’s request for a further extension in the Brexit, European Council President Donald Tusk has planned to provide a year of “flexible” Brextension to the UK. This flexible plan allows the UK to leave earlier if they come up with a deal anytime before the proposed one-year additional extension.

Last Wednesday, May had talks with the Opposition Leader Jeremy Corbyn over Brexit deadlock unlocking. The Opposition MPs marginally voted on that night requesting for a further Brextension instead of having a no-deal Brexit. However, European Council Prez Tusk said that the UK wouldn’t get a “shorter delay” rather would get a “long one”.

PM May and Labor Party Leader Jeremy Corbyn will continue talks today. The outcomes of today’s meet need a close watch as it can impact the future movements of the GBP/USD.

GBP/USD Influencing Events Lined Up For The Day:

12:30 GMT (Highly Volatile Events)

The US Non-Farm Payrolls and the Average Hourly Earnings (YoY) are two highly volatile events scheduled for the day. Both the announcement will be having a direct impact on the cable’s direction. The US Department of Labor will publish both data which will provide the status of Nonfarm and Labor sectors. The market analysts expect the Payroll numbers to come around 180K and a YoY Earnings of 3.4 percent.

12:30 GMT (Mid Volatile events)

The US Department of Labor will broadcast these three Mid Volatile events: The Average Hourly Earnings (MoM), Unemployment Rate and Labor Force Participation Rate. The Consensus estimates an MoM Earnings of 0.3 points, Unemployment Rate of 3.8 points and Labor Force rate of 62.9 percent.

Technical Analysis

GBPUSD 5 Min 5 April 2019
GBPUSD 5 Min 5 April 2019

The Cable saw an uptrend in the Asian trading session touching the resistance level of 1.3119 which later acted as a reversal point for the pair. The GBP/USD after suffering the pullback was supported highly near 1.3090 levels. The pair was trading above the major SMA  (Simple Moving Average) computed for 200-days showing a bullish stance. Rest of the 21-day SMA, 55-day SMA and 100-day SMA stood above the cable depicting significant bearish outlook in its future performance. On the downside, the strong support line of 1.3066 level awaits the pair. In a nutshell, the bears seem to weigh more than the bulls here in the case of GBP/USD.

About the Author

Nik has extensive experience as an Analyst, Trader and Financial Consultant for Global Capital Markets. His vision is to generate Highest, Consistent and Sustained Risk-Adjusted Returns for clients over long term basis and providing them world-class investment advisory services.

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