GBP/USD analysis: Brexit optimism overshadows it all

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3135

Mixed Brexit headers having a lesser effect on Pound prices.
Despite meetings continue and no Irish border solution has been reached, market players are betting on a deal.

The Sterling Pound continues being the best performer, rallying against the greenback to 1.3174, its highest level in three weeks amid the sell-off around the latest following the US mid-term elections' result. Brexit-related headlines kept coming, but the Irish border issue remains unsolved. Cabinet meetings are taking place almost daily in the UK, with a draft agreement that doesn’t include an Irish backstop plan, now on the table. It's yet to be signed by local authorities, not to mention, submitted to the EU. The kingdom's macroeconomic calendar has nothing to offer this Thursday.

Meanwhile, the Pound remains supported by hopes that a last a minute deal will be achieved, also by broad dollar's weakness. The pair retreated from the mentioned high but holds well above the 1.3100 figure, maintaining a positive technical stance. In the 4 hours chart, the pair settled well above a bullish 20 SMA, which extended its advance beyond the 200 EMA, this last some 150 pips below the current level. Technical indicators have corrected from extreme readings, but lost downward strength, now consolidating in overbought territory. The pair has multiple intraday highs and lows in the 1.3190 price zone, with a break above it opening the doors for a retest of the October high at 1.3257.

Support levels: 1.3040 1.3000 1.2970

Resistance levels: 1.3105 1.3150 1.3185

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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