GBP/USD analysis: no Brexit deal, no Pound strength

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3374

DUP menaced to withdraw support to PM May.
GBP/USD nearing critical support at 1.3345.

The GBP/USD pair fell to 1.3357 its lowest in a week this Wednesday, on diluting hopes the UK and the EU could reach an agreement on Brexit this week. Despite the UK PM May has told the House of Commons that "very good progress" has been made on Brexit negotiations, details of cross-border trade are yet to be seen. The DUP has menaced to withdraw its support to the PM, amid their belief that an effective custom would divide the Irish Sea. Furthermore, Brexit Secretary David Davis said that the UK will not “leave one part of the United Kingdom behind”, clearly referring to Northern Ireland and its desire to remain in the single market post-Brexit, while failing to clarify the government's assessment of Brexit consequences. The pair trades some 20 pips above the mentioned low, maintaining a short-term negative bias according to technical readings in the 4 hours chart, as the Momentum indicator heads south at fresh 1-month low, while the RSI also heads south, around 40. Also, the 20 SMA has accelerated lower well above the current level, while after breaking lower, recoveries are being contained by sellers aligned around the 50% retracement of the latest bullish run at 1.3385. The immediate support is 1.3345, the 61.8% retracement of the same rally, with a break below it opening doors for an extension toward 1.3250/60 during the upcoming sessions.

Support levels: 1.3345 1.3300 1.3260

Resistance levels: 1.3385 1.3430 1.3465

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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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