GBP/USD analysis: the end of a Brexit deal hopes?

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2973

The DUP said to back Tory Eurosceptics to make EU’s Northern Ireland backstop illegal.
PM May claims 95% of Brexit deal settled but market players can't see it happening now.

The GBP/USD pair fell to 1.2955, its lowest in over two weeks, following headlines indicating that the Democratic Unionist Party from Northern Ireland (DUP) was said to back the amendment being tabled by Tory Eurosceptics next Wednesday, possibly making then the EU’s Northern Ireland backstop illegal. Market players ignored early headlines coming from UK's PM May, who said that 95% of the EU's withdrawal deal is settled. Addressing to the House of Commons, she also added that an extension of the implementation period is undesirable, although, under certain circumstances, it could be useful. The dollar pared its advance mid-US afternoon, resulting in the pair bouncing some modest 20 pips from the mentioned low. The UK macroeconomic calendar this Tuesday includes the CBI Industrial Trends Orders Survey, and a speech from BOE's Governor Carney, due to speak about artificial intelligence and the world economy at the Annual Machine Learning and the Market for Intelligence Conference.

The 4 hours chart for the GBP/USD pair indicates that the negative momentum could prevail, moreover if the pair remains below the 1.3000 figure. In the mentioned chart, the 20 SMA heads sharply lower, now breaking below the 200 EMA, this last a strong dynamic resistance that the pair was unable to break earlier in the day, while technical indicators remain well into negative ground, the RSI now consolidating around 1.3000. October low comes at 1.2921, with a break below it exposing 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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