GBP/USD Forecast: Extends gains above 1.2600, ignoring Brexit talks
- GBP/USD reaches its highest level in three-weeks despite lack of progress.
- Lack of progress in EU/UK negotiations largely priced in.
- Cable could approach 1.2700 in the upcoming sessions.
The GBP/USD pair advanced for the fourth day in a row on Wednesday, climbing above 1.2600 to reach its highest level since Jun 16 at 1.2620, amid dollar weakness and despite the lack of progress in Brexit talks. On Tuesday, UK Prime Minister Boris Johnson reportedly told German Chancellor Angela Merkel that Britain is ready to end the transition period (Dec 31, 2020) without a deal if the EU is not willing to compromise. No major data releases are due on Thursday.
As for the technical outlook, Cable holds a short-term bullish bias, although it could go through a phase of consolidation as the RSI approaches overbought levels. Meanwhile, the price trades well above its main moving averages as it consolidates near three-week highs. If the GBP/USD breaks decisively above 1.2620, it could approach the 1.2690 zone in the upcoming sessions where the 200-day SMA could offer stiff resistance. On the flip side, supports are seen at 1.2520, 20-period SMA in the 4-hour chart and 1.2480, 200-period SMA.
Support levels: 1.2520 1.2480 1.2440
Resistance levels: 1.2620 1.2690 1.2730
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.
