GBP/USD analysis: Brexit concerns keep weighing the Pound
|GBP/USD Current price: 1.2921
- Positive headlines toward a softer Brexit keep being denied by facts.
- The UK macroeconomic calendar will be quite busy this Monday, with monthly GDP data and production figures.
The GBP/USD pair soared to 1.3027 but was unable to hold on to gains, finishing the week pretty much unchanged around 1.2920. The Pound benefited from news indicating that EU´s chief negotiator, Michel Barnier, has told UK representatives that he was open to discussing alternative backstops to the withdrawal agreement. However, the GBP momentum cooled down after no further details were given on such plans, while, at the same time, Barnier was said to be disappointed by UK's Raab failure to provide data on the trade flows between the UK and Northern Ireland, information that Barnier considers critical to moving on with negotiations. Adding pressure on the pair were the US employment report, much better-than-expected and the escalation of global trade tensions. Beyond Brexit woes, the week will start with loads of UK relevant data, including monthly GDP estimates and Industrial and Manufacturing Production figures for July, seen posting modest advances.
The pair has failed multiple times in its attempts to extend gains beyond the 1.3000 level in the last month but closed the week right above the key 1.2890 region, the 61.8% retracement of the 2016/18 rally. In the daily chart, a bullish 20 DMA converges with the mentioned Fibonacci support, reinforcing it, while technical indicators turned neutral, lacking directional strength around their midlines, signaling that buying interest remains limited. Shorter term, and according to the 4 hours chart, the risk skewed to the downside, as the price is barely holding above a mild bullish 20 SMA, while technical indicators turned sharply lower, now challenging their midlines.
Support levels: 1.2890 1.2845 1.2800
Resistance levels: 1.2945 1.2980 1.3010
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.