GBP/USD analysis: UK government divorces from the EU… and Scotland?
|GBP/USD Current price: 1.2450
The GBP/USD pair plummeted to 1.2440 in the US afternoon, with the Pound undermined by news announcing that the Scottish Parliament backed government's plan to hold a second independence referendum. The news came a day ahead of the official beginning of the Brexit, as UK PM Theresa May, is expected to trigger the Art. 50 of the Lisbon treaty this Wednesday, fueling profit taking in the pair after the latest run to 1.2600. Despite PM May has called for internal unit ahead of the upcoming excision with the EU, Scottish FM Sturgeon said that she has a mandate to call for a referendum, as the Brexit means a change in the status quo. The pair has an immediate support at 1.2430, the 38.2% retracement of the January rally, with a break below it favoring additional declines towards the 1.2330/50 region. The 4 hours chart shows that the price broke below its 20 SMA which lost its upward strength and veered lower around 1.2520, whilst technical indicators have turned south, entering bearish territory or the first time in a week with sharp bearish slopes, favoring additional declines that can extend down to 1.2345, February monthly low and the 50% retracement of January's rally.
Support levels: 1.2430 1.2390 1.2340
Resistance levels: 1.2470 1.2500 1.2535
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