GBP/USD Forecast: About to challenge this year low

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2891

The UK menaced to leave trade talks by June if not enough progress is achieved.
The kingdom insists on an EU-Canada trade agreement, refuses to change rules.
GBP/USD nearing 1.2848, break below the level to anticipate a steeper slide.

The GBP/USD pair fell to 1.2859 this Thursday, with the Pound hurt by the government stance on trade negotiations with the EU. The UK government published a document outlining its priorities for trade talks. Among other things, the document showed that the kingdom is ready to walk away from the negotiation table in June if there’s no progress on talks by that point. Also, the agreement should not require the UK to follow EU standards. "In line with the precedent of the EU-Canada agreement, the deal should recognise the right of each party to set its labour priorities and adopt or modify labour laws," the document reads.

Brexit woes will likely keep hurting Sterling in the upcoming days, overshadowing macroeconomic releases. Anyway, the UK will release the February GFK Consumer Confidence Survey this Friday, foreseen at -8 from -9 in the previous month.

GBP/USD short-term technical outlook

The GBP/USD pair is holding a few pips above the mentioned daily low, and not far from this year low at 1.2848. The pair is bearish according to the 4-hour chart, as it has spent the day below all of its moving averages, while an intraday attempt to advance was rejected by sellers aligned around the 20 SMA. Technical indicators, in the meantime, head firmly lower near oversold readings. A break below 1.2850 should open doors for a steeper decline toward 1.2770, despite dollar’s weakness.

Support levels: 1.2850 1.2805 1.2770

Resistance levels: 1.2915 1.2960 1.3000

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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