GBP/USD analysis: despite positive data, is all about Brexit

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2284

The GBP/USD pair reversed its Thursday's gains to close the week in the red at 1.2284. The Pound got a boost from dollar's FOMC-triggered weakness that resulted in the pair advancing up to 1.2432, a 2-week high. Still, concerns about the upcoming Brexit continued to weigh on the UK currency, fueled by comments by Jonathan Faull. Faull was a British official in the European Commission, who retired this January after the failed attempt to keep the UK in the EU. In an interview last Friday, he said that access to the single market is not "for sale," implicating that the UK will be unable to buy privileged access to the single market after leaving the EU. Despite UK's economic data released during the week showed that the economic momentum kept picking up during the last quarter of the year, news were not enough to benefit the Pound. Technically, the daily chart shows that the price advanced temporarily above a bearish 20 SMA, now around 1.2365, and even beyond the 38.2% retracement of the latest daily decline before sinking. In the same chart, technical indicators have turned south after failing to surpass their mid-lines, maintaining the risk towards the downside. In the shorter term and according to the 4 hours chart, the downside is also favored, with the 20 SMA converging with the 23.6% retracement of the mentioned side around 1.2330, and technical indicators now flat around their mid-lines, after correcting the overbought conditions reached a day before.

Support levels: 1.2260 1.2220 1.2185

Resistance levels: 1.2330 1.2365 1.2410

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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