GBP/USD analysis: Brexit rollercoaster continues
|GBP/USD Current price: 1.2960
- UK inflation remained steady in October, missing the market's expectations.
- UK´s PM May could be subject of a no-confidence vote but seems Cabinet approved the deal
It was another rollercoaster day for the Sterling, as Brexit headlines kept coming. The GBP/USD pair fell to a daily low of 1.2885 on a mixture of fears that the DUP will reject the Brexit deal draft and softer-than-expected UK inflation. According to the official release, UK inflation remained steady in October, missing expectations. Core yearly CPI came in at 1.9% vs. the 2.0% forecast, amid slowing prices in food, clothing, and transport. The pair later surged to a daily high of 1.3035 as some market rumors indicated that the DUP will go with May's plan. A press conference for after the meeting was announced, later denied, later canceled, then re-scheduled, fueling fears of a negative outcome, particularly after some rumors indicating that at least 8 ministers are not willing to support May's plan, and other suggesting a no-confidence vote to be announced this Thursday.
The pair trades at around 1.2960, and the 4 hours chart show that is back above a bearish 20 SMA and now trying to surpass the 200 EMA, while technical indicators diverge from each other, the Momentum heading lower and the RSI modestly higher. Volatility around the GBP/USD is directly correlated to Brexit headlines, overshadowing technical readings, and therefore making it to risky to trade at the current levels. Either below 1.2826 or above 1.3046, the pair could seem some directional strength, depending on how the Brexit deal develops.
Support levels: 1.2860 1.2825 1.2770
Resistance levels: 1.2955 1.3000 1.3045
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