Friday, October 5, 2018

GBP/USD - 05 October 2018

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Fundamental Highlights

The Pound pushes higher towards 1.30000 as Theresa May suggests an all-UK customs union with the EU if her proposed Chequers plan fails in the negotiations. This is a sign that the U.K Prime Minister is aiming for a soft Brexit but with conditions that will satisfy British voters. This was reflected when she stated that “Britain isn’t afraid to leave with no deal”. For today, eyes will shift towards the U.S Dollar with the NFP report set to be released. A better than expected mixture of results from the NFP report will increase the probability that the Federal Reserve will maintain their hawkish plan to hike rates gradually which will pump strength into the greenback and push the Cable pair lower.

Technical Analysis

The Pound bounces off 1.29030 and shoots up towards 1.30495 after positive Brexit remarks from Prime Minister Theresa May. The Pound is projected to continue its short term rally if today's NFP report disappoints. From a technical standpoint, the continuation in the rally will be confirmed when the pair breaks above the 1.30788 resistance level. The second scenario would be the release of a strong NFP report which will pressure the Pound lower. A break below the 1.29950 support level will expose the 1.29324 level representing the third test for this key support level.

Support: 1.29950 1.29324
Resistance: 1.30788 1.31811

Chart (H4)
GBPUSD

 
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