GBP/USD: bearish on fading hopes for a Brexit agreement this week

GBP/USD Current price: 1.3359

  • No Brexit agreement seen this week after David Davis statement.
  • US employment data ahead of Payrolls could push the pair even lower.

The GBP/USD pair trades at fresh weekly lows, sub-1.3400, as optimism about a Brexit deal this week keep fading. Much of the latest decline is correlated to Brexit  Secretary David Davis' words, as he said that the UK will not “leave one part of the United Kingdom behind”, clearly referring to Northern Ireland and its desire to remain in the single market post-Brexit. Furthermore, Davis failed to clarify the government's assessment of Brexit consequences. Broad dollar's strength, adds to GBP/USD bearish momentum. There were no macroeconomic releases in the UK while later today, the US will release multiple employment-related figures, ahead of Friday's Nonfarm Payroll report, including the ADP survey.

Technically, the pair is nearing a key breakout point, the 61.8% retracement of its latest bullish run at 1.3345. Down by around 60 pips from its daily opening, a break below the mentioned Fibonacci support should lead to a bearish acceleration, with 1.3300 being the first probable target, en route to the 1.3250/60 price zone. In the 4 hours chart, the 20 SMA has turned sharply lower above the current level, while technical indicators hold within bearish territory, with limited strength downward at the time being, supporting the case of a bearish extension on further slides. The 50% retracement of the same rally stands at 1.3385, providing an immediate resistance ahead of the 1.3430 region, where the next Fibonacci resistance stands.

Support levels: 1.3345 1.3300 1.3260

Resistance levels: 1.3385 1.3430 1.3465

View Live Chart for the GBP/USD

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