GBP/USD Current price: 1.2895
- UK PM May offered little detail about a plan B for Brexit, headed to Brussels to renegotiate.
- Market players still believe the UK will avoid a hard landing, despite no deal clinched 2 months before the divorce date.
The Pound got a modest boost from Brexit-related news, resulting in the GBP/USD pair hitting a daily high of 1.2910 as UK PM May returned to the Parliament to present alternatives to her Brexit plan. There were not many details, neither a clear difference with which has already been discussed. The PM ruled out a second referendum and the possibility of revoking Art. 50. In fact, she put on evidence the lack of progress as she mentioned she's looking forward to Poland's proposal on a time limit on the Irish backstop, something Poland's foreign minister suggested just today. As a concession, she said that the UK will crap the fee that EU citizens would have to pay after the divorce to receive settled status, remarking that the UK will put in place strong safeguards on workers' rights and environment. Lots of words without substance, as seems unlikely Ireland will accept the limited backstop. This Tuesday, the UK will release the latest employment data, with the ILO unemployment rate in the 3 months to November foreseen steady at 4.1%, and wages' growth also seen matching that of the previous month. Better-than-expected numbers could give the Sterling only a temporal boost, as the employment sector is the lesser of the concerns.
The GBP/USD pair retreated from the mentioned high to trade in the 1.2880/90 price zone, confined to a tight range amid a US holiday limiting volumes. The 4 hours chart shows that the pair remains a handful of pips below a mild bearish 20 SMA, while technical indicators hover around their midlines, without clear directional strength, indicating a limited upward potential, at least as long as the pair remains below 1.2930, the immediate resistance. The bearish potential will likely increase on a break below 1.2830, the daily low and the immediate support.
Support levels: 1.2830 1.2790 1.2750
Resistance levels: 1.2930 1.2975 1.3010
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