Wednesday, July 31, 2019

GBP/USD - 31 July 2019

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Fundamental Highlights

The British Pound pulled back from its multi-month low to settle around 1.2150s as the pair remains under pressure after PM Johnson’s no-deal Brexit narrative. In his first visit to Wales as PM, Mr. Johnson said that it is up to the EU, if the UK will leave without a deal, as he repeatedly pushes to renegotiate the Brexit deal with the bloc. Additionally, not only PM Johnson’s comments that the EU must remove the backstop to avoid a no-deal Brexit but statements from the Irish leader Leo Varadkar and the UK Brexit Secretary Stephen Barclay were also brightening the chances of a no-deal Brexit. Traders will be cautious of the tension ahead of PM Johnson’s Northern Ireland visit and the much-awaited monetary policy meeting by the Fed, both events together could trigger high volatility in today’s session.

Technical Analysis

The Sterling bulls temporarily stopped the bleeding by finding support at 1.2120, pushing price to settle around 1.2150-60s. 1.22 will be a key level to break above for the buyers to regain short-term control, however, failure to do so, the bears will likely gather momentum and push the Cable below the recent lows into new negative territory, accelerating the sell-off towards 1.2050 and possibly 1.20.

Support: 1.2120 / 1.2050 / 1.20
Resistance: 1.22 / 1.2250 / 1.23

Chart (H4)
GBPUSD