GBP/USD analysis: no way out for Brexiteers

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2556

PM May refused to submit the Brexit deal to the Parliament amid lack of support.
May traveling to Brussels to try to get a deal that could pass the Houses.

The GBP/USD pair fell to 1.2506 at the beginning of the US session, a level last seen in April 2017, as UK PM May's leadership came again under scrutiny after she decided to pull out the Brexit deal from the Parliament and rush back to Brussels, trying to get a deal that has chances to pass the Commons. The European Court of Justice ruled earlier on the day that the kingdom could reverse its decision to leave the European Union without consulting other member states, but Downing Street has repeatedly said that they won't revert the decision to leave the Union. May confirmed the deference of the Parliamentary vote as she had no majority to pass it over, and it didn't take long before opposition Corbyn called for May's resignation. Adding fuel to the fire, UK data released this Monday was extremely disappointing, as Industrial and Manufacturing Production plunged in October, much worse than expected, while the monthly NIESR GDP estimate on economic growth printed 0.3% for the 3-month to November, below the previous 0.4%. The UK will release this Tuesday its latest employment data, with average earnings seen matching previous month figures up by 3.0% including bonus, and the ILO unemployment rate foreseen unchanged at 4.1%.

The GBP/USD pair bounced from the mentioned low but just in corrective mode after hitting 1.25, and by no means changing the negative technical stance. Having spent the second half of the last week struggling with a daily descendant trend line, it finally fell below it, now trading over 100 pips from it. In the 4 hours chart, a bearish 20 SMA converges with the mentioned trend line, as technical indicators maintain their downward slopes around oversold readings, signaling strong selling interest. The next big support, should the 1.2500 figure gets broken, is the 1.2330/5 price zone, where the pair has multiple weekly lows and highs back from 2016 and 2017.

Support levels: 1.2500 1.2465 1.2430

Resistance levels: 1.2590 1.2640 1.2675

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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