GBP/USD analysis: bulls retain control ahead of another chaotic week

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3294

Brexit to be delayed whether May's deal passes or not.
EU politics want a reason and a certain date for such a delay.

The GBP/USD pair closed the week with solid gains a handful of pips below the 1.3300 figure and not far below the fresh yearly high of 1.3381 set last Wednesday, after the UK Parliament rejected again PM May's Brexit deal, opening doors for an extension on Art. 50. The pair was extremely volatile as contradictory headlines flooded the news feeds, including chances of a second referendum, down-voted by lawmakers. Meanwhile, PM May insists that is either her deal or no deal. The UK Parliament will decide whether to pass or not May's deal this week once again, but the House of Commons has already voted for an extension, and the length of this last will be linked to May's deal approval. On the other hand, the EU has clearly stated that a valid reason and a determined date would be needed for such an extension to be approved. PM May's leadership has been compromised further with the latest developments, and while the kingdom could avoid the worst scenario on Brexit, or at least delayed, May's future as PM seems already doomed.

The GBP/USD pair heads into the weekly opening with a bullish stance, according to the daily chart, as the price holds firmly above a bullish 20 DMA which stands some 200 pips below the current level, while technical indicators have stabilized within positive territory after correcting overbought conditions. For the shorter term, and according to the 4 hours chart, the risk is also skewed to the upside, as the 20 SMA provided intraday support by the end of the week, while technical indicators also hold well above their midlines. The modest downward slopes of these last could be attributed to decreasing trading volumes at the end of the week, rather than to diminished buying interest. Bulls will try to retest the yearly high if the pair surges past 1.3310, the immediate resistance.

Support levels: 1.3255 1.3205 1.3160

Resistance levels: 1.3310 1.3350 1.3395

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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