Monday, December 10, 2018

GBP/USD - 10 December 2018


Fundamental Highlights

The Pound bounces off the 1.2700 support level following weakness in the US Dollar. The US Dollar weakened even further on Friday after the release of a disappointing NFP report. The NFP report for November showed that only 155k jobs were created compared to the expected 200k. Moreover, wage growth did not meet expectations of 0.3% by growing at 0.2%. In terms of Pound specific fundamentals, no new significant updates arose relating to Brexit as investors await Tuesday’s Brexit vote by the UK Parliament. Even though we don’t expect any significant release related to Brexit today, the Sterling pair may still be moved today by internal British fundamentals given that the UK’s GDP figures will be released.

Technical Analysis

The Pound remains to trade between the 13 and 50 period moving averages indicating uncertainty between investors. It seems like investors are awaiting the results of Tuesday's vote before making a finalized decision about the future direction of the pair. A negative outcome from Tuesday's vote will allow for a break below the 1.2690 support exposing the 1.2620 level. While a positive outcome will drive prices above the 13 and 50 period moving averages paving the way for a rise towards the 1.2875 resistance level.

Support: 1.2699/ 1.2620
Resistance: 1.2813 / 1.2875

Chart (H4)