GBP/USD – British pound subdued as parliament revisits Brexit deal

GBP/USD has posted small gains in the Tuesday session. In North American trade, the pair is trading at 1.3177, up 0.14% on the day. In the U.S., CB Consumer Confidence dropped sharply to 120.5, missing the forecast of 125.2 points. In the U.K., parliament will vote on amendments to the Brexit withdrawal agreement. On Wednesday, the Federal Reserve will publish its monthly rate statement. The U.K. will release Net Lending to Individuals and GfK Consumer Confidence.

All eyes will be on the British parliament on Tuesday, which will vote on amendments to the Brexit withdrawal agreement. There is a great deal of uncertainty surrounding Brexit, but the confusion is unlikely to clear up after Tuesday’s parliamentary proceedings. Prime Minister May has said she will go back to Brussels to make some changes regarding the Irish border issue, but the EU has insisted that it will not reopen the withdrawal deal. On Tuesday, an EU official expressed dismay over the Brexit wrangling, saying that “London has negotiated with itself more than the EU.”

After four rate hikes last year, the Fed is widely expected to ease on policy in 2019. But, by how much? The answer varies, depending on who you ask. The markets are not expecting any increases, while the Federal Reserve continues to stick with a forecast of two hikes. The Congressional Budget Office (CBO) has also weighed in, saying that it expects further rate increases this year. The CBO made the forecast in its 10-year outlook update, but did not specify how many hikes. The CBO report projected growth of 2.3% for the U.S economy in 2019, matching the forecast of the Federal Reserve.

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GBP/USD Fundamentals

Tuesday (January 29)

  • 10:00 US CB Consumer Confidence. Estimate 125.0. Actual 120.2
  • 19:01 British BRC Shop Price Index
  • Tentative – British Parliament Brexit Vote

Wednesday (January 30)

  • 4:30 British Net Lending to Individuals. Estimate 4.3B
  • 8:15 US ADP Nonfarm Employment Change. Estimate 170K
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.50%
  • 14:30 US FOMC Press Conference
  • 19:01 British GfK Consumer Confidence. Estimate -14

*All release times are EST

*Key events are in bold

GBP/USD for Tuesday, January 29, 2019

GBP/USD January 29 at 10:25 EST

Open: 1.3158 High: 1.3199 Low: 1.3130 Close: 1.3177

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2910 1.3000 1.3070 1.3170 1.3258 1.3375

GBP/USD was mostly flat in the Asian session. The pair posted considerable losses in European trade but has ticked higher in North American trade

  • 1.3070 is providing support
  • 1.3170 has switched to a resistance line. It is a weak line
  • Current range: 1.3070 to 1.3170

Further levels in both directions:

  • Below: 1.3070, 1.3000 and 1.2910
  • Above: 1.3170, 1.3258 and 1.3375

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.