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GBP/USD: Falling Amid Speculation of New Elections

Fears of a hard Brexit and the intensifying trade war are set to weigh. Monday's technical picture looks favorable for sellers.
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FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market and was founded in 2000. The website offers a wide range of tools and resources: 24/5 currency news, real-time economic calendar, advanced rates and charts, educational webinars, analysis reports, forecasts, Learning Center, newsletters, industry services, FX customizable studies… As its distinctive trademark, the portal has always been proud of its unyielding compromise to provide neutral and unbiased information and to enable its users to take better and more confident decisions. FXStreet has managed to gain the collaboration of the entire Forex industry, from individual professionals and small companies right up to Forex Brokers and Investment Banks. FXStreet covers the FX Market 24/5: an expert team of journalists, traders and economists picture what the market is doing and what is happening as it happens. Besides the main website in English, the portal is available in 16 other languages (English, Japanese, Simplified Chinese, Traditional Chinese, Spanish, Russian, Arabic, Turkish, Indonesian, Portuguese, German, French, Italian, Hungarian and Vietnamese, Korean and Catalan). FXStreet was short listed as “Best e-FX initiative of the year (vendor)” for the FX Week e-FX Awards 2010.
  • GBP/USD has been falling amid speculation of new elections.
  • Fears of a hard Brexit and the intensifying trade war are set to weigh.
  • Monday’s technical picture looks favorable for sellers.

UK PM Boris Johnson said he only wants to fulfill a campaign promise – but political analysts have been suspecting that his decision to inject £1.8 billion in the National Health Service (NHS) is a political move ahead of fresh elections. Johnson’ s previous cabinet appointments and statements were also seen as moves toward holding a snap vote – and uncertainty weighs on the pound.

Moreover, the PM’s senior adviser Dominic Cummings – considered as the “mastermind” behind the Vote Leave campaign – has said that the government may bypass parliament and head to a no-deal Brexit. The staunch Brexit supporter’s quotes in The Telegraph have weighed on sentiment.

And from one 2016 event – Brexit – we swiftly move to another ramification of that year’s other political shocker – the election of Donald Trump as President of the US. After Trump surprised markets by new tariffs on Chinese goods, the world’s second-largest economy is striking back. China let its currency fall with one dollar now buying over seven yuan – a line that was considered politically sensitive. Moreover, there are reports that Beijing will halt buying of US agricultural goods. Trade tensions have push money into the safety of US bonds – thus making the greenback less attractive. The battle continues.

On the other hand, sterling received a boost from Markit’s upbeat services purchasing managers’ index. The indicator came out at 51.4 points, reflecting a pickup in growth. Nevertheless, it remains at low levels.

Later today, the US ISM Non-Manufacturing PMI is due to show an improvement in America’s largest sector. However, FXStreet’s Surprise Index is pointing to a potential disappointment.

Overall, politics are dominating the scene, with brief periods of impact from services sector figures.

GBP/USD Technical Analysis

GBP USD technical analysis August 5 2019

GBP/USD is trading within a downtrend channel in the past few days and it remains below the 50, 100, and 200 Simple Moving Averages. On the other hand, downside momentum is waning.

All in all, the technical picture is moderately bearish.

Some support awaits at 1.2120 which was the initial post-crash low last week. Further down, the fresh 2019 trough of 1.2075 is the next line to watch. Lower, 1.1985 and 1.1866 are eyed.

Looking up, 1.2185 is the daily high. It is then followed by last week’s post-crash recovery attempt of 1.2250. The next resistance line is only at 1.2380.

Equities Contributor: FXStreet

Source: Equities News

AT&T, T-Mobile and Verizon should be turning the volume up. Their current quiet murmur is just not enough.