GBP/USD analysis: Barnier comments to hit Pound at the weekly opening
GBP/USD Current price: 1.2957
- Hopes of a soft-Brexit are slowly diluting, weekend comments from authorities don´t help.
- UK Markit Manufacturing PMI expected at 55 in August vs. 54 in July.
The GBP/USD fell for a second consecutive day but closed the week with gains at 1.2957, as hopes for an ordered Brexit kept the Sterling supported all through the week. EU Chief Negotiator Barnier spoke to a German newspaper over the weekend, saying that, a customs union between the EU and the UK is still possible, and would make things much easier but also added: "I advise industry to make their supply chains Brexit-proof.” He also said that negotiations don't need more time, that what is needed now are political decisions. UK PM May was also on the wires, saying that she won't be pushed in compromises that are not in the national interest, sticking to the Chequers agreement. She also ruled out a second Brexit referendum. On Sunday, news indicated that Barnier is "strongly opposed" to the Chequers proposal on future trade and advice European carmakers to use fewer UK parts after Brexit. Following a week of scarce data, this one will start with the UK Markit Manufacturing PMI, foreseen at 55 for August vs. 54 in July. Technically, the daily chart shows that technical indicators have lost upward strength but hold within positive territory, the Momentum directionless and the RSI heading lower at 53, while the price holds above a horizontal 20 DMA, all of which limits the downside. The key is the 1.2880/90 region, where the pair has the 61.8% retracement of the 2016/18 rally, as if it gives up again, the pair will enter bearish territory. In the 4 hours chart, the bearish potential is stronger, as the pair settled at its 200 EMA, while the Momentum indicator entered negative territory almost vertically and the RSI hovers around its mid-line.
Support levels: 1.2935 1.2890 1.2850
Resistance levels: 1.3005 1.3045 1.3085
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
