GBP/USD analysis: Brexit-lead bearish trend firmly in place
|GBP/USD Current price: 1.2581
- Brexit stalemate, despite a signed deal, continues denting Sterling demand.
- GBP/USD bounces still seen as selling opportunities.
The GBP/USD pair extended its decline for a sixth consecutive week, finishing it at 1.2583. Brexit chaos remains as the main drag for Sterling, as PM May leadership has been challenged by fellow party members and despite surviving the confidence vote, her authority has been hurt further. Multiple backs and forth haven't changed the fact that the Brexit deal won't be approved by the UK Parliament, neither revised by EU leaders. Mrs. May is looking for reassurances over the Irish backstop, something EU´s representatives agreed on, always clarifying that within what already has been signed.
The GBP/USD pair bottomed at 1.2479 last week, its lowest since April 2017, bouncing up to 1.2686 after PM May survived to the no-confidence vote, resuming its decline afterward. The mentioned high was way below the weekly one at 1.2759, indicating that market players still see recoveries as an opportunity to sell. According to the daily chart, the bearish trend is set to continue, as the pair is developing well below its 20 DMA, which extends its slump below the 200 EMA, while technical indicators resumed their declines within negative levels after a modest bounce from nearly oversold readings. In the 4 hours chart, the price settled below a directionless 20 SMA, while technical indicators hold within bearish ground, the Momentum heading lower and the RSI hovering around 45, all of which maintains the risk skewed to the downside.
Support levels: 1.2545 1.2510 1.2475
Resistance levels: 1.2620 1.2665 1.2700
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