- Boris Johnson plans to overturn post-Brexit deals, which could weaken the pound.
- The US GDP will show how the economy fared in Q1.
- The price is trading below the 30-SMA in the charts.
Today’s GBP/USD outlook is bearish as Brexit risks and economic uncertainties are weighing on the pair. Britain’s economic and political outlook is bleak as the country faces high inflation, and the government plans to ignore pre-agreed rules on post-Brexit trade with Northern Ireland.
–Are you interested in learning more about Canadian forex brokers? Check our detailed guide-
The move by British Prime Minister Boris Johnson to overturn parts of the Brexit deal over Northern Ireland trade has not been received well by the European Union.
“If the bill passes in its current form, it will lead to a significant deterioration in relations with our major trading partner, and it would be a large drag on sterling,” said Colin Asher, senior economist at Mizuho. He went on to say that this drag on the pound would be in the future as the bill still had to pass through the House of Lords.
GBP/USD key events today
GBP/USD investors will pay attention to two crucial speeches from the UK and the US. The Bank of England’s Governor, Bailey, is set to speak later in the day, and investors will expect to get clues on the next rate hike. Fed Chair Powell is also set to speak later today.
There will also be a Gross Domestic Product report from the US that will show how the economy is faring amid rising interest rates. Investors expect the GDP (QoQ) (Q1) to hold at -1.5%. A value higher than expected could push GBP/USD lower as it would show the economy can survive an aggressive Federal Reserve. The reverse is also true.
GBP/USD technical outlook: Bears dominating
Looking at the 4-hour chart, we see the price pushing lower. It has broken below the 30-SMA, showing bears have taken over. The RSI also favors bearish momentum, trading below the 50 level.
–Are you interested in learning more about high leveraged brokers? Check our detailed guide-
The price is currently experiencing support at 1.21584. If bears can maintain their control, we could see a break below this level and the price heading toward the next support at 1.19507. However, if this level holds support, we could see bulls returning to push the price back to 1.24020.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money