GBP/USD Outlook: DUP's rejection of Brexit plan additionally complicates the situation
|GBP/USD
Cable fell in early European trading on Thursday after Northern Ireland's DUP rejected to support Brexit deal as it stands that additionally complicated the situation, as EU summit starts today and two sides are still away from final agreement.
Sterling remains highly volatile and react to any news from Brexit negotiations, but is still supported by Brexit optimism, as cable was up over 5% in past five days and hit new five-month high at 1.2876 on Wednesday, where the advance was capped by key resistance zone, provided by key Fibo resistance at 1.2882 (38.2% retracement of 1.4376/1.1958 descend).
Daily studies are bullish but overbought stochastic and RSI and stalling bullish momentum, warn of rejection here and corrective/consolidative action, as larger downtrend from 1.4376 (17 Apr 2018 peak) is still in play.
Near-term bulls are expected to remain intact while dips hold above broken 200DMA (1.2712) reinforced by golden-cross with rising 5DMA), while break lower would signal deeper correction.
However, news from Brexit negotiations will remain pound's key driver these days, with various scenarios being on the table.
The clock is ticking for UK negotiators following today's DUP's rejection that reduces hopes for agreement that would be verified in two-day EU summit. Bets on Britain's leave on 31 Oct, with or without deal are high, but also possibility of deadline extension, as British parliament may force PM Johnson to request a three-month delay if the agreement is not approved by the parliament by the end of Saturday.
Res: 1.2833; 1.2882; 1.3000; 1.3045
Sup: 1.2771; 1.2749; 1.2712; 1.2656
Interested in GBP/USD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.