GBP/USD analysis: takes a breather after UK leadership vote

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2678

The GBP/USD pair took a breather on Thursday and spent most of the day in a narrow range, following the previous day’s fall. In the UK, the Conservative Party's Boris Johnson easily won the first vote to lead the party and the country. He got 114 votes, while his closest rival, Jeremy Hunt, got 43 votes. Johnson has said the UK must leave the EU by October 31st – the current Brexit deadline – but also that aims for leaving with a deal. The next round of vote takes place on Tuesday, June 18.

From a technical view, 4-hour chart shows price developing in a range bounded by the 20-SMA on the upside and the 100-SMA on the downside, while the Relative Strength Index and Momentum have both turned back down, favouring a bearish continuation. Meanwhile, in daily charts, oversold conditions have already been corrected, reinforcing the negative perspective. A break below 1.2650 could accelerate the fall toward 1.2610 and then 1.2560. On the flip side, GBP/USD needs to regain 1.2770 to ease the short-term bearish pressure. In that case, it could dare to advance to 1.2820.

Support levels: 1.2650 1.2610 1.2560

Resistance levels: 1.2770 1.2800 1.2825

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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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