GBP/USD Forecast: Brexit delay hopes push Sterling above 1.2900 targeting 1.2970 near-term

The GBP/USD is trading little changed around 1.2900 as the UK Brexit Minister travels to Brussels for meeting with EU chief Brexit negotiator Michel Barnier.
The UK Prime Minister Theresa May plans to meet with European Commission President Jean-Claude Juncker and speak to the leader of every European Union member state in upcoming days with Foreign Secretary Jeremy Hunt Brexit Secretary Steve Barclay meeting European partners today.
The GBP/USD broke the downward sloping trend on the upside and Slow Stochastics made a bullish crossover in the Oversold territory indicating upside potential for Sterling.

Mario Blascak, PhD Independent Analyst

The GBP/USD is trading little changed on the upside at above 1.2900 as the UK Brexit Minister Steve Barclay travels to Brussels for a meeting with the European Union chief Brexit negotiator Michel Barnier in a last minute attempt to re-negotiate the Brexit deal.

The UK Prime Minister Theresa May plans to meet the European Commission President Jean-Claude Juncker before the European Council meeting scheduled for March 20-21 and her Cabinet Ministers support the effort by bilateral meeting as well.

The UK Cabinet Office Minister David Lidington said his experience last week in Brussels was that there were more than just a courtesy talks on Brexit, indicating that the UK government might be able to re-negotiate the Brexit deal or to delay the Brexit term scheduled for March 29.

Overall market activity is expected to be lower as banks in the US and Canada are closed in observance of President's day and Family day respectively.

Technically the GBP/USD broke away from the downward sloping trend that saw the currency pair fall as low as 1.2770 last week and it is stagnating above 1.2900 now. The break out on the upside was also confirmed by the bullish crossover of Slow Stochastics in the Oversold territory and then the reversal of the Relative Strength Index to the upside.

While 1.2877 representing a 100-day moving average (DMA) should as a support line in the near-term, the GBP/USD is likely to target 1.2970-1.3000. On the downside, the 100-DMA at 1.2877 is short-term support with the break below likely to see 1.2830 level tested that represents a 50-DMA.

GBP/USD daily chart

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

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