GBP/USD jumps over 1%, Brexit talks resume

Pound Jumps as US 10-year yield drops

On Wednesday, the pair is trading at 1.3202, down 0.27% on the day. The British pound roared on Tuesday, as the US dollar was the pound’s punching bag for the day. GBP/USD jumped 1.02%, its strongest one-day gain since June 1st. The pair touched a high of 1.3267, a level not seen since December 2019. There was no significant data out of the US or the UK on Tuesday, and GBP/USD gained ground as the 10-year US yield fell for a third successive day. As well, the logjam in Washington, DC over the fiscal stimulus package has dampened sentiment for the US dollar.

Brexit talks continue

The British government has said that it can reach a trade deal with the EU in September, but is this wishful thinking? The UK and EU teams meet in Brussels on Wednesday for a seventh-round of negotiations. There are significant gaps between the sides over fishing rights, competition rules and the mechanism for enforcing a trade deal. The UK has ruled out extending Brexit talks beyond December, and given the lack of trust between the sides, a new trade deal is by no means a foregone conclusion.

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GBP/USD Technical

The pair was flat in the Asian session but has headed lower in European trade

  • 1.3296 is the next resistance line. Above, there is resistance at 1.3349.
  • 1.3144 is providing support. The next support line is 1.3045.
  • The 10-day MA has been under downward pressure all week but has some breathing room

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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