GBP/USD analysis: more delays from PM May

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2899

UK PM May said she will return to the Parliament on February 26, hopefully with a modified deal.
The UK will release January CPI and PPI January updates with yearly inflation seen below 2.0%.

The GBP/USD pair closed the day up amid easing dollar demand, although the pair remained unable to recover the 1.2900 level. There were no macroeconomic releases coming from the UK, although PM May spoke before the UK Parliament. Among her most notorious comments, she repeated that the government plans to honor Brexit's vote and leave on March 29, rejecting the possibility of remaining in the EU customs union. She added that they are still exploring alternatives to the backstop, and will return to the Parliament on February 26. If there is going to take place a new vote on a modified deal, it would then take place after that date. There were some rumors earlier in the day suggesting that PM May would resign next September, later denied by her spokesman. This Wednesday, the UK will release January CPI and PPI data, with inflation expected to have retreated below 2.0% yearly basis.

The pair posted a lower low and a lower high daily basis, which maintains the dominant downward trend firmly in place. In the 4 hours chart, the recovery is below its 20 SMA and 200 EMA, both converging around 1.2920. Technical indicators have recovered within negative levels, but the RSI is already losing upward momentum around 42, a sign of absent buying conviction. The 1.2830 level is quite a relevant static support as the pair has several daily lows around it from last January, with a break below it probably resulting in a sustained bearish extension this Wednesday.

Support levels: 1.2830 1.2795 1.2760

Resistance levels: 1.2885 1.2930 1.2965

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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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