GBP/USD analysis: hopes for a softer Brexit keep the Pound bid

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3099

The GBP/USD pair broke higher and settled around 1.3100, its highest since September last year, as hopes for a softer Brexit kept the Pound bid during the second half of the week, with the rally later fueled by USD weakness. PM Theresa May have asked opposition Labour for support with the Brexit, and news last week showed that she is considering setting up a cross-party Brexit commission, which somehow backed the case for a more EU friendly Brexit. The pair tripped stops above previous 2017 high on US weak data, topping on Friday at 1.3113. Next Tuesday, the UK will release its June employment figures, expected to remain close to 3%, but hopes of a rate hike cooled down on poor local data, putting the BOE on a tough position ahead of their next monetary policy meeting. In the meantime, the daily chart shows that the Momentum remains above its 100 level with limited upward strength, but also that the RSI indicator heads sharply higher at 67 as the 20 SMA advanced below the current level, in line with additional gains for this Monday. In the 4 hours chart, technical indicators have eased partially, but remain within extreme overbought levels, while the price stands far above its moving averages. 1.3047, the previous yearly high is the immediate support, and as long as it holds, the risk will remain towards the upside.

Support levels: 1.3050 1.3010 1.2965

Resistance levels: 1.3120 1.3160 1.3200

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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