GBP/USD analysis: up for the day but Brexit's deal Parliamentary vote looms

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2633

Downing Street not expecting the Parliament to approve May's Brexit deal.
Pound at risk of plummeting again below 1.2500 against the greenback.

The GBP/USD pair recovered nicely from a nose-dive below the 1.2500 figure, trading late US session near its daily high in the 1.2640 price zone. The FX board was all about the greenback, which appreciated on an early run to safety, but later gave up on soft local data and fears several other US companies will end up downgrading their revenues forecasts due to persistent tensions with China. In Downing Street, tensions mount as the Brexit deal vote in Parliament looms. Late Wednesday, expectations that Mrs. May won concessions from the EU were downplayed, following comments from the foreign secretary, Jeremy Hunt, who claimed that PM May will present MPs with a new "clearer language" regarding the backstop agreement. With little over a week ahead of the Parliamentary meaningful vote, chances are still against May's Brexit deal, therefore same goes for chances of a Pound's sustainable rally. The UK Construction PMI fell to 52.8 in December, slightly below expectations of 52.9 and below the previous 53.4. The kingdom will release the Services PMI for December, foreseen at 50.7 and money figures for November.

The GBP/USD pair is poised to close the day with modest gains but the short-term picture continues to indicate that the upward potential is limited, as, in the 4 hours chart, the price remains below a bearish 20 SMA which extends its decline below the 200 EMA, while the Momentum indicator maintains a firm downward slope below its mid-line and the RSI tries to stabilize around 48.

Support levels: 1.2610 1.2570 1.2535

Resistance levels: 1.2650 1.2685 1.2720

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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