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GBP/USD Slammed by Brexit Drama, Dollar-Yen Eyes Inflation Data

11

US DOLLAR OUTLOOK: GBP/USD SPIKES LOWER AMID LATEST BREXIT DEVELOPMENTS AS USD/JPY AWAITS INFLATION DATA DUE

  • US Greenback went on a wild experience throughout Thursday’s trading session as EUR/USD whipsawed
  • GBP/USD plunged amid contemporary Brexit drama and USD/JPY modified little forward of inflation information
  • The DXY Index completed in constructive territory on stability as danger aversion boosted the Dollar

US Greenback bulls flexed their muscle groups on Thursday and steered USD worth motion larger on web after starting the session notably in crimson territory. The DXY Index traded about 0.6% decrease across the New York opening bell with US Greenback draw back owed largely to EUR/USD leaping in response to a lack of ECB jawboning. As trading progressed, nevertheless, spot GBP/USD worth motion began to steal the highlight.

Begins in:

Dwell now:

Sep 17

( 16:09 GMT )

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GBP/USD PRICE CHART: DAILY TIME FRAME (02 MAR TO 10 SEP 2020)

GBP USD Price Chart US Dollar Outlook

The Pound-Greenback has traded defensively amid emergency Brexit talks and promoting stress accelerated shortly mid-session. GBP/USD moved sharply decrease after headlines crossed the wires detailing how the EU is contemplating taking authorized motion in opposition to Prime Minister Boris Johnson and the UK over plans to renege on the Withdrawal Settlement.

GBP/USD BEARISH

Data supplied by

of shoppers are web lengthy. of shoppers are web quick.

Change in Longs Shorts OI
Each day 3% -13% -6%
Weekly 33% -28% -7%

The steep slide notched by GBP/USD over the previous few days seems to have damaged its positively-sloped trendline connecting the 19 March and 30 June swing lows. That stated, there may very well be potential for the Pound Sterling and GBP/USD worth motion to remain subdued in gentle of mounting Brexit uncertainty. Rising danger aversion pushed by Brexit and main inventory indices spiraling decrease possible weighed positively on the US Greenback broadly as a result of its posturing as a high safe-haven currency.

USD/JPY PRICE CHART: DAILY TIME FRAME (18 APR TO 10 SEP 2020)

USD JPY Price Chart US Dollar Outlook

USD/JPY worth motion traded blended on stability as dealer indecision shaped a doji star on the every day candlestick chart. The Dollar-Yen continues to gravitate alongside its bearish 50-day shifting common, however spot costs have notched a collection of upper lows for the reason that finish of July. Correspondingly, USD/JPY has coiled right into a triangle sample of consolidation during the last a number of weeks.

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Maybe upcoming US inflation information due this Friday, 11 September at 13:30 GMT would possibly catch FX merchants by shock if the precise determine differs materially from market forecast, which may spark a sizeable transfer within the Dollar-Yen. Theoretically talking, a hotter-than-expected inflation print may weigh negatively on USD/JPY with benchmark rates of interest possible anchored to zero for the foreseeable future.

— Written by Wealthy Dvorak, Analyst for DailyFX.com

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