GBP/USD analysis: tension mounts ahead of Brexit vote, no clear direction yet

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2743

The UK Parliament continues debating the post-Brexit era, but the key vote will be on Dec 11.
GBP/USD may attract bulls only above 1.2880, the 61.8% retracement of the 2016/18 rally.

The GBP/USD pair recovered some ground after hitting Tuesday 1.2657, a fresh yearly low but spent the day within the early week range. Market players are turning more cautious ahead of the Parliamentary Brexit vote that will take place next Tuesday, giving less relevance to intraday headlines that shed no light but rather muddy the waters. Adding to Pound's turmoil the Markit Services PMI eased to a 28-month low of 50.4 in November, missing the market's expectations of 52.5 and below the previous 52.2, with both, business activity and incoming new work weakening. There are no relevant data scheduled in the UK for this Thursday.

The pair peaked for the day at 1.2797 on broad dollar's weakness, retreating once again from the daily descendant trend line coming from November high at 1.3174. There's a long-term resistance at 1.2880, the 61.8% retracement of the 2016/18 rally, and the market will perceive the pair as bullish only on a break above it. In the meantime, the short-term picture is neutral as the pair is a few pips above a mild-bearish 20 SMA, while the Momentum indicator aims modestly higher around its mid-line while the RSI indicator heads nowhere around 50.

Support levels: 1.2730 1.2695 1.2660

Resistance levels: 1.2760 1.2800 1.2840

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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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