GBP/USD Forecast: Bulls ignore Brexit negative headlines

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3384

European Commission’s chief Ursula von der Leyen warned a Brexit deal is far from certain.
EU’s chief negotiator Barnier has menaced to pull out of negotiations.
GBP/USD trades near 1.3400 with bearish divergences appearing in the 4-hour chart.

The GBP/USD pair is ending Wednesday near a daily high of 1.3393, holding on to intraday gains despite not so optimistic Brexit headlines. The pair fell to 1.3303 following comments from European Commission’s chief Ursula von der Leyen, who warned a Brexit deal is far from certain. Also, the EU’s chief negotiator Michel Barnier has menaced to pull out of the negotiation table if the UK is not willing to compromise on the outstanding issues. Fisheries’ rights are at the top of the list. Still, speculative interest ignored the gloomy headlines and kept selling the greenback.

The UK macroeconomic calendar has nothing relevant to offer for the rest of the week. Brexit headlines, on the other hand, may introduce big noise in thinned trading due to a US holiday.

GBP/USD short-term technical outlook

The 4-hour chart for the GBP/USD pair shows a potential divergence coming from the Momentum indicator, as the pair keeps advancing while the indicator keeps decreasing, now piercing its midline. A bullish 20 SMA provides support around 1.3340, and a break below it could be the first sign of a bearish corrective decline. An extension above 1.3410, on the other hand, could lead to a test of the 1.3500 threshold.

Support levels: 1.3340 1.3290 1.3250

Resistance levels: 1.3410 1.3460 1.3500

View Live Chart for the GBP/USD

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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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