GBP/USD Forecast: Critical support at 1.2820
|GBP/USD Current Price: 1.2885
- Brexit-related concerns and demand for the dollar weighed on the pair.
- UK economy giving signs of continued improvement but falling short of supporting Pound.
- GBP/USD at its lowest since November, bearish momentum persists.
The GBP/USD pair fell for a third consecutive day, to close the week at 1.2885, its lowest since last November. The Pound capitulated to dollar’s demand, in spite of UK data h giving encouraging signs. On Friday, a survey showed that the country’s retailers saw their sales jump to the highest level in six years last month, amid political stability following PM Johnson’s victory. However, the same report shows that the advance may be well due to liquidations amid high stock levels.
Meanwhile, Brexit woes continue to affect Sterling. The UK has officially abandoned the Union, but a deal on the future relationship is still to be done. The UK and the EU seem to be in opposed stances toward how future trade should be conducted, hence triggering concerns an agreement can’t be reached before December. The UK won’t release relevant data this Monday.
GBP/USD short-term technical outlook
The GBP/USD pair is poised to extend its decline, as, in the daily chart, it is developing below a bearish 20 DMA while pressuring a bullish 100DMA. Technical indicators head firmly lower within negative levels, the RSI at its lowest since October. The 4-hour chart shows that the 20 SMA has accelerated its decline below the larger ones and far above the current level. The Momentum indicator bounced from its low, but the RSI keeps heading south, currently at 26. The pair may continue to fall, particularly on a break below 1.2820 a relevant static support level.
Support levels: 1.2865 1.2820 1.2775
Resistance levels: 1.2920 1.2970 1.3010
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