GBP/USD analysis: Pound stumble with Brexit jitters

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3419

Irish border issues drag Pound lower, despite broad dollar's weakness.
GBP/USD regained 1.3400 on the back of BOE's Ramsden comments.

The GBP/USD pair surged to a two-week high of 1.3471, but Brexit jitters sent it sub-1.3400 mid-US session amid tensions within PM May's cabinet over the Irish border issue. There were some rumors making the rounds at the beginning of the day suggesting that Brexit minister, David Davis, could step down on differences with PM May. After multiple backs and forths all through the day, the British government set a goal for a one-year backstop plan that would see the UK remain in a customs union with the EU if there's not a solution for the Irish hard border issue. Anyway, this backstop plan has to be agreed by EU officials, who have already commented against it. The BOE will release its consumer inflation expectations this Friday, latest at 2.9%, and actually not a big market mover. As it happens with other major economies next week´s UK calendar will be much more interesting in terms of data releases., including inflation and employment updates. The GBP/USD pair bottomed at 1.3372 and regained the 1.3400 on broad dollar's weakness and comments from BOE´s Ramsden, who said that the slowdown in Q1 was temporary and that wages are set to rise. Now trading at around 1.3430, the 4 hours chart shows that the buying interest defended ground around a bullish 20 SMA, while technical indicators have retreated from overbought levels, but pared their slides and are actually trying to regain the upside, favoring another leg lower, although Brexit jitters may be a drag, opposing to technical readings.

Support levels: 1.3395 1.3360 1.3320

Resistance levels: 1.3450 1.3490 1.3530

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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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