GBP/USD analysis: lot of water under the bridge

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2795

The UK government has three days to present a plan B in the case May's deal gets rejected by the Parliament next week.
GBP/USD up for the day but Brexit jitters prevent it from recovering beyond 1.2800.

Brexit-related headlines kept coming throughout the day, with things looking tough for PM May. The parliament voted that, if May's plan gets defeated, the government will have three days to present an alternative plan, in a clear attempt to rush into a solution before a hard-Brexit becomes real on March 29th. A government spokesman said the government always planned to provide certainty quickly if the Brexit deal is voted down next week, but is hard to see "fresh certainties" available. Furthermore, PM May said that the Parliament will have a vote on implementing the backstop, but that is on EU's hands, no May's one. The situation is chaotic in the UK and the GBP/USD pair holds above 1.2700 only because of broad dollar's weakness. At this point, however, seems Parliament rejection of May's deal has been already priced in.

The pair traded as high as 1.2803, finding it hard to extend its gains beyond the 1.28 mark amid Brexit woes. The short-term picture, however, offers a positive technical stance, as in the 4 hours chart, the pair is holding above its moving averages, while the 20 SMA firms up above the 200 EMA, this last acting as dynamic support at around 1.2720. The Momentum indicator is heading nowhere right above its mid-line quite neutral, while the RSI advances around 64, favoring further gains on a break above 1.2815, December 31st high and the immediate resistance.

Support levels: 1.2755 1.2720 1.2680

Resistance levels: 1.2815 1.2850 1.2895

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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