GBP/USD Forecast: Brexit talks not doing well
GBP/USD Current price: 1.2351
- UK activity output contracted to record lows amid coronavirus-related lockdown.
- The UK is making “impossible demands” within Brexit negotiations.
- GBP/USD holding above 1.2300 but unable to extend gains.
The GBP/USD pair is ending Thursday with modest gains in the 1.2350 region, despite UK data fell way short of the market’s expectations. As it happened with other major economies, the preliminary estimates of Markit PMIs came at record lows, amid the coronavirus pandemic lockdown. The Manufacturing PMI came in at 32.9 while the Services PMI fell to 12.3 Also the CBI Industrial Trends Survey on Orders posted -56 in April from -29 in March.
In the Brexit front, rumours made the round that the UK is making “impossible demands” over access to Europol databases within the ongoing negotiations, while refusing to extend the transition period beyond December 31, despite the current coronavirus crisis. This Friday, the kingdom will publish March Retail Sales, seen down by 4% MoM and by 4.7% YoY.
GBP/USD Technical Outlook
The GBP/USD pair has been hovering around the current level for much of the day, heading into the Asian session with a neutral stance. On a positive note, the pair has found support around the 50% retracement of its March’s decline at 1.2305. In the 4-hour chart, technical indicators diverge, with the Momentum heading higher and the RSI lower, although both within neutral levels, Meanwhile, the pair remains trapped within directionless moving averages, which also reflect the absence of dominant interest.
Support levels: 1.2305 1.2275 1.2230
Resistance levels: 1.2350 1.2385 1.2420
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.
