GBP/USD analysis: no-deal Brexit plans in the making

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2891

UK Cabinet said to be preparing a no-deal Brexit plan sends Pound nose-diving.
UK first-tier data to be out next Friday, including preliminary Q2 GDP.

The Pound nose-dived to its lowest since August 2017 against the greenback, hitting 1.2853 to settle some 20 pips above this last, on increased concerns of a no-deal Brexit. The pair broke below the 1.2900 level before a fresh headline sent it further down, as news hit the wires indicating that UK PM May is planning a special cabinet meeting for September, to discuss a plan for a no-deal Brexit. The tougher issue the UK is facing is trying to avoid a hard border in Ireland as the EU is against the UK's proposed backstop that included all the kingdom, and not just Northern Ireland. Brexit negotiations are set to resume next week. The UK will release multiple first-tier figures next Friday, including preliminary Q2 GDP and fresh trade figures, but the macroeconomic calendar will remain empty this Thursday. The GBP/USD pair recovered from the mentioned low to settle around 1.2900, maintaining the bearish tone intact, according to technical readings in the 4 hours chart, as it holds far below a bearish 20 SMA, capping advances now at around 1.2950 while technical indicators recovered, but barely corrected extreme oversold conditions, with the RSI currently trying to advance above its 30 level. The bearish potential could ease on a continued recovery beyond 1.2960, but renewed selling interest below 1.2850 should signal a fresh 2018 low for this Thursday.

Support levels: 1.2850 1.2810 1.2770

Resistance levels:1.2920 1.2960 1.3000

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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