GBP/USD analysis: a new chapter of Brexit saga grants volatility for Pound crosses
|GBP/USD Current price: 1.2865
- Frenetic cross-party talks continue ahead of Monday's deadline for a Brexit plan B.
- With little over two months to go for the departure date, hopes for a softer Brexit could collapse any time.
The Pound Sterling gave back its early weekly gains and finished it little changed in the 1.2870 price zone against the greenback, retreating from a 2-month high of 1.3000, as investors rushed to take profits out of the table ahead of a new Brexit chapter. After May's deal was defeated in Parliament last week, she was given up to this Monday to come with an alternative plan. Frenetic cross-party talks have occurred these last few days, although opposition leader Corbyn has refused to talk with the PM until a no-deal Brexit is off the table. There are no clues on how PM May intends to proceed this Monday, as she didn't discuss any changes to the initial plan with the EU, with policymakers from across the pond clearly indicating that is up to the UK to solve this. The clock keeps ticking, with little over two months to the departure date. Bets about a soft-Brexit, however, remain high, supporting the Pound against most major rivals.
Technically, the daily chart shows that the pair holds well above a firmly bullish 20 SMA, this last some 150 pips below the current level, while the 200 EMA gains bearish strength around 1.3035. Technical indicators in the mentioned chart have eased strongly after nearing overbought territory, heading south within positive levels, signaling the decline may continue but without confirming a bearish extension throughout the day. Shorter term, and according to the 4 hours chart, the risk has skewed to the downside, as the pair broke and settled below its 20 SMA, which lost upward strength, while technical indicators retreated all the way down to their midlines, the Momentum lacking directional strength but the RSI maintaining its bearish slope, currently at 47.
Support levels: 1.2840 1.2800 1.2760
Resistance levels: 1.2890 1.2930 1.2975
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