GBP/USD analysis: checkmate for PM May and Brexiteers
|GBP/USD Current price: 1.2514
- German Merkel, EU Juncker rejected UK PM's May attempts to reignite negotiations.
- UK jobs' sector posted some encouraging readings, overshadowed by Brexit turmoil.
The GBP/USD pair reached a new yearly low of 1.2491 before bouncing modestly, with the Pound holding on to the dubious honor of being the weakest currency of the G-20 bloc. The pair traded as high as 1.2638 during London hours, boosted by some comments from Irish Deputy Prime Minister Simon Coveney, who said that there is potential for a new statement from the EU on the Irish backstop, although clarifying it's not going to change. The UK released some encouraging readings regarding employment also this Tuesday, as the number of people in work rose by 78K in the three months to September, while the unemployment rate held steady at 4.1%. Wages were up to 3.3% both including and excluding bonus, posting the fastest pace of wages grow since 2010. News that German Merkel rejected UK's May attempt to renegotiate the Brexit deal and renewed speculation that MPs have sent 48 letters for a non-confidence vote on PM May, take Sterling down later on the day. There's no way out of this checkmate for Brexiteers. The UK won't release macroeconomic data this Wednesday, with tensions mounting ahead of Thursday's EU Brexit summit, as EU´s Tusk has made it clear that renegotiating the deal won't be on the table.
The pair is down for a sixth consecutive week but there are no signs of downward exhaustion, neither of an upcoming change in the current downward trade. The pair is trading below Monday's closing level and posted a lower low and a lower high daily basis, signaling bears hold the grip tight. In the shorter term, and according to the 4 hours chart, the risk is also skewed to the downside, as the 20 SMA accelerates south well above the current level, while technical indicators quickly resumed their declines after correcting oversold conditions, now maintaining strong downward slopes.
Support levels: 1.2490 1.2465 1.2430
Resistance levels: 1.2550 1.2590 1.2640
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