GBP/USD outlook: Cable loses ground after negative news on trade talks
|GBP/USD
Cable fell over a hundred pips on Thursday after news said that EU and UK negotiators failed to close a gap on state aid, a key element of new agreement on post-Brexit trade ties.
The sentiment was further soured on news that European Commission President will announce legal action against the UK over its plan to undercut the Brexit divorce treaty.
Data on Thursday showed that British factory activity grew for a fourth straight month in September, although more slowly than previous month that added to negative tone.
The pair posted fresh recovery high at 1.2950, driven by month-end flows, before sharp fall that already erased Wednesday’s gains and pressuring pivotal support at 1.2813 (10DMA).
Daily indicators turned south, with momentum threatening of break into negative territory that would further boost fresh bears.
Loss of 10DMA support would risk test of daily cloud base (1.2759) which guards key supports at 1.2715/1.2675 (200DMA / 23 Sep low).
Res: 1.2900; 1.2950; 1.2966; 1.3000
Sup: 1.2811; 1.2759; 1.2715; 1.2675
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