GBP/USD analysis: Brexit deal still nowhere to be found

GBP/USD Current price: 1.3057

  • A deal could be announced next week, or maybe in December, or who knows when.
  • Pound bulls disappointed by the lack of progress in Brexit negotiations and back and forth rumors.

Speculation about a possible date for a withdrawal agreement, fell short of offsetting early Brexit-related news, indicating that UK's PM May will fly to Brussels to plead with EU leaders for more to get an agreement with her Cabinet. The GBP/USD pair traded as low as 1.3086 this Wednesday, recovering from the level but losing the positive tone seen on these last few days.  Meetings in the UK and with EU authorities are taking place almost daily, and the latest Pound boost was given by The Times after the newspaper reported that a full withdrawal agreement could be published next Tuesday after UK's Brexit Secretary Raab and EU's Chief negotiator Barnier meet. Other headers suggest that a deal will be reached within three weeks. The UK will release this Friday preliminary Q3 GDP, with growth foreseen up 0.6% in the three months to September, above Q2 0.4%. The kingdom will also release September Trade balance, and Industrial and Manufacturing Production, the combination of which will give fresh clues about the UK's economic health.

The pair extended its decline after breaking below the 1.3100 figure, now bearish according to intraday technical readings, as in the 4 hours chart the pair is now below a bullish 20 SMA around 1.3095, while technical indicators accelerated their declines entering negative ground, all of which puts the pair at risk of falling further. The bullish potential has eased and bears are slowly taking control of the pair. Below 1.3040 the risk of a downward extension will be higher, and if UK data comes below expected this Friday, the pair could end the week closer to the 1.2900 level.

Support levels: 1.3040 1.3000 1.2970    

Resistance levels:  1.3095 1.3130 1.3175

View Live Chart for the GBP/USD

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