GBP/USD Forecast: Brexit blues risk uptrend support

The GBP/USD is trading below 1.2900 after reaching a peak of 1.2930 on Tuesday. Brexit negotiations continue, and both the European Union and the United Kingdom concluded that the reaching a deal in mid-October, at the EU Summit, is quite improbable. The new deadline is sometime in November. Any delay increases the risk of a no-deal Brexit which markets fear.

Also, the US Dollar is recovering some lost ground. The upbeat mood that followed the US-Mexican deal is fading, and concerns about US-Chinese relations is rising. The greenback got a boost from the Conference Board's Consumer Confidence measure which hit the highest levels since the year 2000. 

The primary indicator of the day is the second estimate of US GDP for Q2. A small downgrade is on the cards after the robust read of 4.1% initially published. 

See: US GDP Preview: A minor downgrade will not deter the Fed, export component is key

No UK figures are projected today, and the focus remains on Brexit and US data.

GBP/USD Technical Analysis

The GBP/USD is trading alongside an uptrend support line since mid-August. The pair dipped below the trend line earlier but managed to recapture it. It hit the 50 Simple Moving Average on the four-hour chart. The Relative Strength Index and Momentum are stable.

Support awaits at 1.2845, the day's low and the 50 SMA. Lower, the round number of 1.2800 supported the pair last week. 1.2760 limited the pair's rise in mid-August and 1.2730 supported cable before it shot higher.

1.2940 is a double top after holding the pair down last week and also during this week. 1.3000 is a round number that also had a role in both directions. 1.3045 supported the GBP/USD before it tumbled below 1.3000.

More: Brexit: Talking is good, timing is bad, and agreeing can be ugly