GBP/USD analysis: Sterling smashed by mounting speculation of no-deal Brexit
|GBP/USD Current price: 1.2700
- The UK CBI Distributive Trade Survey showed that retailers reported weakened sales in October.
- UK calendar to remain scarce, focus still on the lack of progress around Brexit.
The Pound remains the weakest currency across the board, briefly piercing the 1.2700 level in the US afternoon to post its second worst yearly close, as the pair is not far from this 2018 low of 1.2661. Broad dollar's strength, political woes in the Union, and the absence of progress in Brexit negotiations all combined to weigh Sterling lower, with no fresh catalyst behind Tuesday's slump. A minor macroeconomic report for sure added to the GBP´s gloom and doom, as the CBI Distributive Trade Survey showed that retailers reported weakened sales in October, with the indicator up just 5%, the lowest since April and down from 23% in September. This Wednesday, the UK will release the GFK Consumer Confidence Survey and the BCR Shop Price Index, both for October, none of it capable to change the negative bias of the Pound.
From a technical point of view, the pair is oversold in the short-term, but there are no signs that the ongoing slump can change course, as in the 4 hours chart, the pair continues developing below a firmly bearish 20 SMA, while technical indicators hold at weekly lows, the RSI currently at 22. Below the mentioned yearly low, the next relevant level and a possible bearish target is 1.2588, June 2017 monthly low. Still unclear, a break below the 1.2500 level should open doors for a continued slump, despite the mentioned oversold conditions.
Support levels: 1.2775 1.2740 1.2700
Resistance levels:1.2850 1.2880 1.2925
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