GBP/USD analysis: short-term bearish, Brexit summit takes center stage

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3154

UK and EU negotiators working around the clock to clinch a deal before Wednesday.
UK employment data to be out next Tuesday could be overshadowed by Brexit headlines.

The GBP/USD pair hit 1.3246 in the last trading day of the week but closed the day roughly 100 pips below the level. The greenback strengthened on the back of easing yields and stabilizing equities, while the Pound was hurt by deteriorating hopes about a Brexit deal, as late Friday, headlines indicate that no-deal has been reached yet. Brexit has been in the eye of the storm these last days, with many confident headlines produced by officers from both sides but little material progress on the deal. Negotiators are working around the clock ahead of the Brexit summit that will take place this Wednesday. The UK won't publish relevant data this Monday but will release September employment figures on Tuesday.

The pair closed the week with modest gains, just below the 1.3170 level, the 50% retracement of the 2016/18 rally. In the daily chart, the pair offers a neutral stance, as the pair held above a flat 20 DMA, while technical indicators turned lower, the Momentum confined to neutral readings and the RSI currently at 55, both lacking directional strength. According to the 4 hours chart, the pair risks extending its downward move, as it settled below a still bullish 20 SMA, while technical indicators maintain their bearish slopes in negative territory. Such a slide could be more evident on a break below 1.3130, the immediate support, as the pair has several intraday highs and lows around it.

Support levels: 1.3130 1.3095 1.3050

Resistance levels: 1.3170 1.3200 1.3245

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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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