GBP/USD analysis: corrective advance unlikely to extend beyond 1.3000
|GBP/USD Current price: 1.2891
- Brexit uncertainty to keep the upside limited for the Pound.
- Latest GBP/USD recovery a result of dollar's weakness.
The GBP/USD pair recovered on Friday and closed the week little changed to the downside around 1.2890, helped by decreasing demand for the greenback. The Sterling got brief support from better-than-expected Retail Sales released during London trading hours, up by 1.0% MoM and by 4.2% YoY in January. Nevertheless, uncertainty surrounding Brexit maintains the upside limited. In that front, no news is to be reported. UK PM May is determined to leave on March 29, despite unable to reach a consensual deal with MPs, as the EU refuses to change the withdrawal already agreed, while the UK keeps searching for an alternative to the Irish backstop. The UK macroeconomic calendar will kick start Tuesday, with the latest employment updates for the kingdom.
The daily chart shows that, despite the strong bounce, technical indicators have barely rebounded from their daily lows, with the pair now hovering a few pips above the 23.6% retracement of its latest daily slump from 1.3217. In the same chart, the 20 DMA converges with the 50% retracement of the same slide at 1.2990, another barrier toward a firmer recovery past 1.3000. The short-term picture also suggests a limited upward potential as technical indicators lost their upward strength after reaching their midlines, while, despite now above the 20 SMA, the 200 EMA caps the upside at around 1.2910.
Support levels: 1.2840 1.2805 1.2770
Resistance levels: 1.2910 1.2950 1.2990
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