GBP/USD eases to a session low of 1.3301
It may be a UK holiday but the pound is among the more notable movers in the major currencies space today, with cable easing towards 1.3300 in European morning trade.
The pound is looking weaker to start the day, as news over the weekend hasn’t been too pleasant for the most part.
The UK reaffirmed
that they are willing to walk away from Brexit talks ahead of the crunch negotiating period in September, while the UK Treasury is reported
to push for significant tax hikes in order to plug the rising budget deficit.
Those are some headwinds for the pound to consider in the bigger picture.
For cable though, the slight pullback today isn’t leading to much yet. There is still some support from the 23.6 retracement level @ 1.3294 and buyers are still firmly in near-term control as price action rests well above the key hourly moving averages.
The two factors mentioned may lend itself to a weaker pound in the month ahead, but I would argue that such a possibility will be more evident on the crosses rather than against the dollar – which itself is in a precarious spot right now.
That said, just be mindful that if Brexit negotiations take a turn for the better, it would certainly help shift the narrative for the pound in the weeks ahead as well.