GBP/USD Current price: 1.3096
- Brexit tension mounts, and while a deal is not yet done, hopes maintain the Pound afloat.
- US elections' outcome to affect Pound's direction to a lesser extent.
The GBP/USD pair topped for the day at 1.3096, its highest since October 19, as despite contradictory Brexit headlines kept flooding news' feeds, hopes for a deal prevailed. Among several other news, the most relevant was EU related, as the Times reported that the Union is preparing to offer an "independent mechanism" by which Britain could end a temporary customs arrangement with the bloc. While not a final solution, at least will be enough to break the stalemate in negotiations, and grant and deal split by March next year. EU's leading negotiator, Michel Barnier said that the EU won't seal a deal that doesn't include avoiding a hard border in Ireland, adding that he will recommend a summit only with decisive progress on an Irish backstop. UK PM May´s cabinet met this Tuesday, where ministers discussed a compromise plan for the Irish backstop. There won't be further meetings this week as plenty of work needs to be done, according to a May's spokesman.
The GBP/USD pair retreated from the mentioned high but recovered quickly, holding near 1.3100 and maintaining the bullish tone seen on previous updates. In the 4 hours chart, the pair remains firm above its 200 EMA, while the 20 SMA extends its advance above the larger one. The intraday back and forth in price left the Momentum indicator within familiar levels right above its mid-line, while the RSI indicator maintains its bullish slope despite being in extreme overbought readings, currently at 78. A break through 1.3105 should lead to a steeper recovery up to the 1.3185 region. If US elections result against the greenback, the GBP/USD pair rally will likely be exacerbated, while on a positive outcome for Trump, dollar's gains may be limited against the Pound.
Support levels: 1.3040 1.3000 1.2970
Resistance levels: 1.3105 1.3150 1.3185
View Live Chart for the GBP/USD
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