GBP/USD analysis: bulls gave up to Brexit chaos

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2899

Brexit chaos continues, 1922 Committee asking PM May for a timeline on her departure.
GBP/USD slow but steady decline set to continue.

The GBP/USD pair spent most of the day in positive ground at around 1.2950, but gave up to dollar's strength in the final hours of the day, settling near a fresh 2-month low of 1.2887. The Pound was undermined by headlines indicating that talks between PM May and Labour leader Jeremy Corbyn are at a brink of collapsing, amid inconsolable differences. Further adding to the ongoing Brexit uncertainty, the 1922 Committee emergency meeting ended with policymakers rejecting a rule change which would allow a new procedure to oust Theresa May but demanded a clearer timetable on her departure. Politicians seem to be on a limbo, unable to take advantage of the extra time granted by the EU. The UK released March Public Sector Net Borrowing, which posted a larger-than-expected increase of £0.840B. For this Thursday, the kingdom has scheduled the CBI survey on Orders for May.

Technically, the 4 hours chart shows that the risk for the pair remains skewed to the downside, as a bearish 20 SMA capped the upside on an attempt to recover ground, now offering a dynamic resistance at around 1.2965, while the price is further below the 200 EMA, this last also gaining downward traction. Technical indicators in the mentioned chart turned south, breaking below its latest consolidative range, with the RSI currently at around 26, all of which supports additional declines ahead.

Support levels: 1.2880 1.2835 1.2790

Resistance levels: 1.2965 1.3000 1.3040

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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