GBP/USD Analysis: Pressure mounts as EU27 decides what’s next on Brexit

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2919

EU27 set to discuss Brexit extension, sooner possible answer next Friday.
Rumors about a UK election arose after PM’s Johnson defeat in Parliament.
GBP/USD short-term bearish with scope to lose the 1.2800 level.

The GBP/USD pair is trading around 1.2920 by the end of the American session, up daily basis, although having extended its weekly decline to 1.2841. The pair spent the day below the 1.2900 figure, as the Pound fell out of the market’s favor after the Parliament put a lid to PM Johnson’s plan to get his Brexit deal approved before October 31^st. The ball rolled the EU’s side of the court, as European leaders should now decide on a delay to the UK’s departure from the Union. Market talks suggest that the EU27 is willing to grant a three-month extension, although a formal announcement is not expected before Friday. In the meantime, odds for a new election increased. News agencies reported a “source” from Downing Street stated that “if parliament’s delay is agreed by Brussels, then the only way the country can move on is with an election.”

The UK macroeconomic calendar had nothing relevant to offer this Wednesday and will remain light during the next 24 hours, as the kingdom will only release September BBA Mortgage Approvals.

GBP/USD short-term technical outlook

The GBP/USD pair is at the upper end of its daily range, but the risk remains skewed to the downside according to intraday technical readings. In the 4 hours chart, the pair is confined to a tight range below a flat 20 SMA, although still far above the larger ones, which maintain their bullish slopes. Technical indicators in the same chart are recovering the Momentum within negative levels, and the RSI entering positive ground. Overall, the pair has little chances of recovering ground as long as it remains below 1.2950, the immediate resistance.

Support levels: 1.2870 1.2830 1.2785

Resistance levels: 1.2950 1.2990 1.3030

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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