GBP/USD – British pound steady as EU approves Brexit deal

GBP/USD has posted slight gains in the Monday session. In North American trade, the pair is trading at 1.2829, up 0.10% on the day. It’s a quiet start to the week, with no major releases. On Tuesday, the U.K. releases CBI Realized Sales and the BRC Shop Price Index. The U.S. will release CB Consumer Confidence, which is forecast to dip to 136.2 points.

On Sunday, 27 European Union leaders gathered in Brussels and gave their approval to the Brexit withdrawal agreement, as well as a political declaration on economic relations between Britain and the EU after Brexit. At the meeting, EU leaders took pains to warn British parliamentarians that the EU will not agree to reopen the agreement. Dutch Prime Minister summed up the mood in Brussels, saying “there is no Plan B”. The EU has signaled that the deal signed on Sunday is “take it or leave it” – if the U.K. doesn’t sign on, the result will be a hard Brexit which could be catastrophic for the British economy. Prime Minister May joined the summit on Sunday and again urged British lawmakers to approve the deal, saying it met most of Britain’s demands. Still, May will have an uphill battle pushing the deal through parliament, with the Labor party and many Conservative MPs set to vote against the deal.

The markets have grown accustomed to strong economic numbers from the U.S, but quarterly GDP readings have been falling throughout 2018. This has led to speculation that the Federal Reserve could ease up on its interest rate hikes next year. Only a few weeks ago, there were expectations that the Fed might raise rates each quarter in 2019, but the mood has become more cautious. The U.S.-China trade war has caused a slowdown both economies, and President Trump’s $1.5 trillion tax cut has boosted the economy, but its effect on the economy is fading. A slowdown in the U.S economy would further exacerbate difficult conditions for the global economy, which is already feeling the effects of the global trade war.

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GBP/USD Fundamentals

Monday (November 26)

  • 4:30 British High Street Lending. Estimate 38.9K. Actual 39.7K
  • 13:30 BoE Governor Carney Speaks

Tuesday (November 27)

  • 6:00 British CBI Realized Sales. Estimate 10
  • 10:00 US CB Consumer Confidence. Estimate 136.2
  • 19:01 British BRC Shop Price Index

*All release times are EST

*Key events are in bold

GBP/USD for Monday, November 26, 2018

GBP/USD November 26 at 10:45 EST

Open: 1.2817 High: 1.2865 Low: 1.2797 Close: 1.2829

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2589 1.2706 1.2812 1.2915 1.3048 1.3173

In the Asian session, GBP/USD ticked lower but then recovered. In the European session,

  • 1.2812 is under pressure in support. It could break on Friday
  • 1.2915 is the next resistance line
  • Current range: 1.2812 to 1.2915

Further levels in both directions:

  • Below: 1.2812, 1.2706, 1.2589 and 1.2488
  • Above: 1.2915, 1.3048 and 1.3173

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.