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GBP/USD Daily Price Forecast – Cable Continues Tumbling Down on May’s Step Down Uncertainties

By:
Nikhil Khandelwal
Published: May 17, 2019, 09:09 UTC

The Cable tumbled to two months low levels. May might arrange the voting sessions on the first week of June. Tories stay cherished as PM’s resignation plans sets in.

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The GBP/USD pair had started trading this week near 1.3007 healthy levels. Today, the pair kept struggling near 1.2782 levels (1.76% weekly down). Weak GBP reports, Brexit uncertainties, and Strengthening Greenback remained among the primary plunge rationales.

More than a weekly low, the pair drifts near its two months bottom levels. The Investors remain mull seeing the ongoing Brexit drama.

What’s Happening Around Brexit?

On the Brexit front, more complications seem to occur as UK PM Theresa May sets in plans to step down soon. The PM is about to appeal again for her thrice defeated deal on the first week of June. May proclaimed that she would leave office if she receives strong support on her fourth attempt.

However, the situation could only worsen with her stepping down from the top position. The focus will be on electing, a new leader who will further add to the Brexit delay.

Anyhow, the final deadline for the EU-UK divorce is on October 31. If she wins in her last attempt to receive support, the party will have to initiate the election process earlier. And, after a new leader getting elected, he/she may have a different outlook towards Brexit. In a nutshell, some additional delays are imminent, putting the Cable further down.

Meanwhile, Cross-party talks completed six weeks but seem to cast no progress yet. Now, the parties plan to look for a consensus from among the MPs to draw a proper decision.

GBP/USD Influencing Events

On to the events section, there is only a single GBP event lined-up for the day. That is the release of the report of CFTC GBP Non-Commercial Net Positions. This report previously recorded around £-6.9K.

At the denominator side of the GBP/USD pair, the University of Michigan will provide a survey of personal consumer confidence in U.S. economic activity. The market expects the numbers to increase this time. This Confidence report might significantly increase/decrease the pair today. Laterwards, two prominent members of the Federal Reserve system will talk about the U.S. economic conditions. Mr. Richard Clarida, the Vice Chair, will speak on the Fed’s review of its monetary policy strategy. Whereas, the NewYork Fed’s Governor, John C. Williams would give opinions about economies and financial systems.

Technical Analysis

GBPUSD 60 Min 17 May 2019
GBPUSD 60 Min 17 May 2019

The GBP/USD pair gets underway downtrend reaching near 1.2786 levels which got hit last on February 14. The pair was testing this active support line near 1.2785 levels. However, if the pair suffered a significant pullback, then the next support point awaits near 1.2675 levels. The possibility of a rebound at this point seems less likely to happen as per the Ichimoku Clouds. The technical indicator demonstrated a bearish outlook hovering above the Sterling Pound pair. The base line and conversion line supported the bear call, moving overhead the Cable. The Relative Strength Index (RSI) indicated intense selling pressure pointing near 25 levels.

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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