GBP/USD Forecast: With no-deal Brexit Sterling dwells at 1.3100 targeting 1.3030 and 1.2970
|- The GBP/USD slipped to 1.3075 on Wednesday the Brexit summit turned into a disaster with the EU officials said to have dropped the plans for a Brexit summit in November because of lack of progress.
- The UK headline and core retail sales both slumped -0.8% in September.
- Once the 1.3100 key support level was broken, the GBP/USD is set to target 1.3030 and 1.2970 on the downside.
The GBP/USD is trading on the downside at around 1.3100 after the UK retail sales report saw both total sales and retail sales excluding motor fuel slumping -0.8% over the month in September. The biggest drag on GBP/USD though is the failure of the Brexit summit late on Wednesday to generate positive headlines.
In fact, the Brexit summit turned to be a disaster after the EU officials said they dropped the plans for any November Brexit summit as not enough progress in talks was made so far. The UK Prime Minister Theresa May counter attacked with saying that “considerable progress has been made since Salzburg” but the war of words is a tie given the limited market reaction.
Various European Union officials made clear well ahead of the Brexit summit that October meeting will not deliver the final agreement. The Irish Foreign Minister Simon Coveney said that “people should not panic if no deal this week” getting the markets for the Brexit summit outcome.
In the run-up to the Brexit summit, the European Council President Donald Tusk said that no deal is more likely than ever before.
Technically, the GBP/USD closed the Monday gap on the downside at 1.3085 and after rising as high as 1.3238 it moves lower.
The technical oscillators are in the neutral territory on the 1-hour chart and further potential lays on the downside. Once the GBP/USD broke the confluence resistance of 1.3095 representing a 100-day moving average and the 38.2% Fibonacci retracement of a move from 1.4377 to 1.2662 the currency should target lower levels of 1.3030 and 1.2970 further down. On the upside the GBP/USD the immediate target is 1.3230-1.3250 last week’s high.
GBP/USD 1-hour chart
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