GBP/USD analysis: Brexit headlines hit bulls' determination

GBP/USD Current price: 1.3032

• Brexit date looms with no changes to the Irish backstop on the table.
• EU representatives waiting for PM May to come with a Parliament-approved proposal.

The GBP/USD pair near the 1.3100 level but ended up losing some ground for a second consecutive day, as fears of a hard-Brexit came back, following comments from a UK official, quoted saying that getting a Brexit deal by next week is unlikely. EU officials want PM May to secure the changes she wants on the Irish backstop in the Parliament before asking EU leaders to sign them, which seems quite logical, as the other way around isn't working. The UK Parliament is scheduled to vote next Feb 27, and it has been said that the EU would not offer a new legal declaration, which will only clarify points but include no changed, until Feb 28. According to the same source, the text may be agreed on mid-March and put for approval to EU leaders in the summit due March 21-22. In this scenario, Sterling buyers have little to work with. This Friday, the UK will only see the release of a CBI survey on realized trades.

The pair heads into the Asian opening trading around its daily lows, having spent the last two trading days hovering around a major Fibonacci resistance, the 61.8% retracement of the 1.3217/1.2772 decline at 1.3050, now a handful of pips below it. In the 4 hours chart, the 20 SMA maintains its bullish slope below the current level and above the 200 EMA, while technical indicators retreat from overbought readings, heading south but within positive levels, all of which skews the risk to the downside without confirming it. A steeper decline seems likely on a break below 1.2995, the 50% retracement of the mentioned slide.

Support levels: 1.2995 1.2950 1.2910                                               

Resistance levels: 1.3050 1.3090 1.3140  

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