GBP/USD analysis: stuck to 1.3000 as investors wait for definitions

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2992

European currencies in the green despite risk-off mood.
The EU has a new customs proposal, but it doesn't fit May's ambitions.

A peak of optimism about Brexit sent the GBP/USD pair up to 1.3043 this Tuesday, although, after reading beyond the headline, markets' players realized that there's nothing new under the sun. News indicated that the EU is willing to offer PM May a UK-wide customs union as a way around the Irish backstop issue, but it will have to be negotiated separated to the Withdrawal agreement. PM May, however, wants a UK-wide customs backstop that is legally-binding and included in the divorce bill. The pair was unable to hold on to gains also because safe-havens increased demand following Wall Street's opening, as US indexes collapsed following the lead of its overseas counterparts, fueling the greenback against high-yielding counterparts. The UK macroeconomic calendar will just offer a minor reading this Wednesday, September Mortgages Approvals.

The GBP/USD pair settled below the 1.3000 figure after hitting a fresh weekly low of 1.2936, with the bearish case supported by the unsolved Brexit negotiations. Technical readings in the 4 hours chart support a downward extension, as the price is currently developing below a firmly bearish 20 SMA, which extends its slump below the 200 EMA, as technical indicators remain within negative ground, although with no certain directional strength. The main bearish target for the upcoming sessions continues being 1.2880, the 61.8% retracement of the 2016/18 rally.

Support levels: 1.2955 1.2920 1.2880

Resistance levels: 1.3000 1.3040 1.3085

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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