British Pound (GBP) – GBP/USD Forecast, Chart and Analysis:
- EU/UK trade talks resume next week against a familiar backdrop.
- Sterling likely to remain under pressure.
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EU/UK Trade Talks Continue to Weigh on Sterling
The latest round of EU/UK trade negotiations broke up a day early Thursday, with both sides continuing to play the blame game. EU chief negotiator Michel Barnier said that the EU’s position needs to be better understood and ‘respected’ by the UK, while UK negotiator David Frost opined that ‘significant disagreement’ remained on a number of important issues. Talks will continue next week, yet as we stand there seems to be no middle ground on a number of issues and while that remains the case, any Sterling upside will be kept in check.
The latest COVID-19 data show new cases in the UK continuing to fall with Thursday’s number of 576 new infections the lowest number since the start of the coronavirus lockdown. Fatalities also fell to 89 cases yesterday compared to 149 one week ago. While a very welcome step in the right direction, the UK hospitality sector opens on Saturday and these COVID-19 figures need to be closely monitored over the next two weeks.
GBP/USD is nudging lower again today and remains trapped under a zone between 1.2517 (61.8% Fib) and the June 24 high at 1.2544. The multi-week low at 1.2252 is guarded by the 50% Fibonacci retracement at 1.2306 and should provide reasonable short-term support. The US is closed today, so price action may be limited until the start of trade next week.
GBP/USD Daily Price Chart (December 2019 – July 3, 2020)
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