GBP / USD – Sterling down as Parliament revisits Brexit agreement

GBP / USD posted slight gains in Tuesday's session. In North America, the pair is trading at 1.3177, up 0.14% on the day. In the United States, consumer confidence CB fell sharply to 120.5 points, exceeding the forecast of 125.2 points. In the United Kingdom, Parliament will vote on the amendments to the Brexit withdrawal agreement. On Wednesday, the Federal Reserve will release its monthly rate statement. The UK will publish Net Lending to Individuals and GfK Consumer Confidence.

All eyes will be on the British Parliament on Tuesday, which will vote on the amendments to the Brexit withdrawal agreement. The Brexit raises a lot of uncertainty, but it is unlikely that the confusion will disappear after Tuesday's parliamentary proceedings. Prime Minister May said she would return to Brussels to make some changes regarding the Irish border problem, but the EU insisted not to reopen the withdrawal agreement. On Tuesday, an EU official expressed dismay at the Brexit talks, saying "London has negotiated with itself more than the EU".

After four rate hikes last year, the Fed should soften its policy in 2019. But by how much? The answer varies depending on who you ask. Markets are not expecting any increase, while the Federal Reserve continues to stick to two rising expectations. The Congressional Budget Office (CBO) has also expressed its view, indicating that there is an expectation of further rate increases this year. The CBO made the forecast in its 10-year outlook update, but did not specify the number of increases. The CBO announces a projected 2.3% growth in the US economy in 2019, which is in line with the Federal Reserve's forecast.

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Fundamentals GBP / USD

Tuesday, January 29

• 10:00 am American consumer confidence. Estimate 125.0. Real 120.2
  
• 19:01 British Retail Price Index (BRC)
• Attempt – British Parliament vote on Brexit

Wednesday (January 30)

• 4.30 pm British net lending to individuals. Estimation 4.3B
• 8:15 US ADP Change in non-agricultural employment. Estimate 170K
• 14:00 Statement of the US FOMC
• 14:00 US federal funds rate. Estimate
• 14:30 US FOMC Press Conference
• 19:01 British consumer confidence GfK. Estimate -14

* All hours of release are EST

* Key events are in bold

GBP / USD for Tuesday, January 29, 2019

GBP / USD January 29 at 10:25 EST

Open: 1.3158 high: 1.3199 Low: 1.3130 To close: 1.3177

GBP / USD Technical

GBP / USD was virtually flat during the Asian session. The pair has recorded considerable losses in European trade but has seen an increase in North American trade

• 1.3070 provides support
• 1.3170 has moved to a resistance line. This is a weak line
• Current range: 1.3070 to 1.3170

Other levels in both directions:

• Below: 1.3070, 1.3000 and 1.2910
• Above: 1.3170, 1.3258 and 1.3375

This article is for general information only. This is not an investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its affiliates, subsidiaries, officers or directors. Leverage trading is high risk and not suitable for all. You could lose all your deposited funds.

Kenny Fisher joined OANDA in 2012 as a currency badyst. Kenny writes daily about current economic and political developments affecting major currency pairs, with a focus on fundamental badysis. Kenny began his foreign exchange career at Bendix Foreign Exchange in Toronto, where he worked as a corporate account manager for more than seven years.