GBP/USD analysis: breaking through 1.2400, but mid-range

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2416

The GBP/USD pair erased half of its Monday's gains, as the Pound got hit by comments coming from Guy Verhofstadt, the chief Brexit negotiator for the European Union's parliament, who said that the UK must be completely severed from the EU before the next European Parliament elections, which take place in May 2019. That left a 14-15 months´ window for Brexit negotiations. A decline in crude oil prices also weighed on the Pound, with the commodity being subject of profit taking after rallying up to $49 a barrel. The pair traded as high as 1.2512, but was unable to hold on to gains, and broke below the 1.2400 figure ahead of Wall Street 's close. Still far above the 1.2330 critical support, the pair has a neutral stance in the short term, given that in the 4 hours chart, the price is holding above a horizontal 20 SMA, while the Momentum indicator has bounced from its 100 level, and heads north, opposing to the RSI indicator that turned south and is currently around 48. The pair seems to have found a new comfort zone within 1.2300 and 1.2600, with the longer term risk still towards the downside amid Brexit woes.

Support levels: 1.2395 1.2350 1.2310

Resistance levels: 1.2440 1.2485 1.2520

View Live Chart for the GBP/USD

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.

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