GBP/USD analysis: Brexit developments and UK GDP take center stage

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3189

Despite ending the week in the red against the greenback, the Pound posted a nice come back on Friday, ending the day some 100 pips above its daily low, at 1.3189. Increased dollar's demand coupled with poor UK data and Brexit jitters to send the pair lower during these last few days, but the pair bounced on the last day of it after UK's PM Theresa May and the EU Commission agreed to speed up negotiations. Boosting the pair were comments from PM May, who said that the kingdom is ready to honor the financial commitment made to the EU at a joint press conference with European Commission President Jean-Claude Juncker. The UK will release its Q3 preliminary GDP this week, expected at 0.3%. Any divergence from such number will be a big motor for the Pound. From a technical point of view, the daily chart shows that the recovery was not enough to change the latest negative bias, as the pair continues developing below a sharply bearish 20 DMA, whilst technical indicators hold below their mid-lines, although with no clear directional strength. In the 4 hours chart, the pair presents a neutral stance, trading a couple of pips above the 50% retracement of its latest bullish run and a flat 20 SMA, while technical indicators turned flat around their mid-lines.

Support levels: 1.3145 1.3090 1.3050

Resistance levels: 1.3220 1.3260 1.3300

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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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