GBP/USD analysis: no-deal Brexit overshadows everything else

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2706

Upbeat UK Retail Sales weren't able to support the Sterling.
Brexit talks resumed in Brussels, focus on Irish border.

The Pound remains among the weakest currencies of the G-10 group, as despite strong UK data and broad dollar's weakness, the GBP/USD pair barely settled above the 1.2700 level. UK Retail Sales were sharply up in July, backed by online sales and the good weather. Core sales, which exclude volatile energy prices, surged by 0.9% in the month, and by 3.7% from a year earlier, both surpassing expectations and a nice bounce from June's soft figures. Nevertheless, concerns about a no-deal Brexit keep denting Pound's demand. Brexit talks have resumed this Thursday in Brussels with the main issue being on how to prevent a hard border in the Irish Island, although high-profile politicians won't attend the meeting. The short-term picture for the GBP/USD pair is neutral-to-bearish, as it was unable to advance beyond its 20 SMA in the 4 hours chart, while technical indicators keep hovering within negative levels, lacking clear directional strength. The yearly low, achieved this week at 1.2661 is the key support that could be challenged with negative Brexit headlines, opening doors for a continued decline toward the 1.2500 region for the upcoming weeks.

Support levels: 1.2665 1.2620 1.2575

Resistance levels: 1.2735 1.2760 1.2795

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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