GBP/USD analysis: holding on to gains, despite Brexit headlines

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3238

PM May planning a higher Brexit divorce-bill offer to move talks into the second phase.
EU's chief Brexit negotiator Michel Barnier, not willing to discuss post-Brexit trade yet.

The GBP/USD jumped to a 3-week high of 1.3279 this Monday, unaltered by German headlines, and with the Pound getting a boost early London, by news suggesting that the UK government was planning to double its Florence Brexit divorce bill offer to the EU of £20B, hoping to accelerate post-Brexit trade talks. However, EU authorities are unwilling to move to a second phase, and the payment seems to be a minor concern, as EU's chief Brexit negotiator, Michel Barnier, hinted that the EU is ready to block any trade deal with the UK if the kingdom does not conform to the values of the Union. Is not the monetary offering what open future trade talks, but the UK surrendering to EU's conditions. On the macroeconomic front, the UK will release its Inflation Hearings report and the CBI industrial trends survey this Tuesday. The pair holds on to gains, despite easing from the mentioned high, now trading in the 13230 region. The 4 hours chart shows that the price remains well above a bullish 20 SMA, which crossed above a still flat 200 EMA, while technical indicators have gyrated lower, holding anyway within positive territory. Below 1.3195, the risk will lean towards the downside, with scope then to extend its decline toward 1.3130.

Support levels: 1.3195 1.3160 1.3130

Resistance levels: 1.3225 1.3260 1.3300

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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