GBP/USD analysis: holding higher ground on Brexit hopes

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3055

UK PM's May and EU's Juncker agreed that talks have been "constructive."
Sterling demand to keep the pair up as long as hopes for a deal Brexit prevail.

The GBP/USD pair hit 1.3108 on a combination of a weaker dollar and encouraging headlines related to Brexit. The Spanish Foreign Minister, Josep Borrell said that a Brexit accord was "being hammered out now," adding that it can be interpreted or complemented with explanations that may be satisfactory for the UK Parliament. Nevertheless, EU´s officials kept repeating that there is no room for reopening the deal. UK's PM May met EU's Juncker, in an attempt to revamp the withdrawal deal before submitting it again to the House of Commons next week. Both leaders agreed that talks have been constructive, urging their respective teams to continue to explore options "in a positive spirit." They agreed to talk again before the end of the month. Good intentions, no material solution, as usual. The UK has a quiet macroeconomic calendar this Thursday, with only BOE's Haldane scheduled to speak.

The pair trimmed daily gains as the USD strengthened with FOMC's Minutes, holding a couple of pips above a major Fibonacci level, the 61.8% retracement of the 1.3217/1.2772 decline at 1.3050. In the 4 hours chart, technical indicators are retreating from overbought levels, far from indicating a bearish downturn. The 20 SMA in the mentioned chart maintains a strong upward slope after crossing above the 200 EMA, both well below the current level, keeping the risk skewed to the upside.

Support levels: 1.3050 1.3010 1.2970

Resistance levels: 1.3090 1.3140 1.3185

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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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