GBP/USD Forecast: Mounting Brexit tensions could hit the Pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2463

Brexit talks finished earlier amid “serious divergences,” according to both parts.
UK will publish Consumer Confidence and the June Services PMI this Friday.
GBP/USD still depends on the market’s sentiment for direction.

The GBP/USD pair hit a fresh weekly high of 1.2529 but trimmed intraday gains ahead of the close, trading flat for the day at around 1.2460. The UK didn’t publish macroeconomic data, leaving the pair in the hands of sentiment. News, however, came from the Brexit front, as European Commission President Ursula von der Leyen commented on the latest developments. According to her words, the EU and the UK are still quite far apart from reaching an agreement, adding that the EU will not accept Brexit agreement at any price and that the EU will have to prepare for other possible exit strategies on Brexit.

Weekly talks come to an early end this Thursday, as, according to EU’s chief negotiator Barnier complained of a lack of respect and engagement by the British government. “Serious divergences” remain according to both parts. The UK will publish this Friday the GFK Consumer Confidence previously at -30, while Markit will publish the final version of the UK June Markit Services PMI, foreseen unchanged at 47.

GBP/USD short-term technical outlook

The GBP/USD pair is losing its positive momentum, but still far from bearish, according to intraday technical readings. In the 4-hour chart, it failed to sustain intraday gains above a bearish 100 SMA but remains above the 20 and 200 SMA, with the shortest still heading north. Technical indicators have retreated from intraday highs but stabilized well above their mid-lines. The pair could gather some bearish momentum on a break below 1.2450, the immediate support.

Support levels: 1.2450 1.2400 1.2360

Resistance levels: 1.2505 1.2560 1.2600

View Live Chart for the GBP/USD

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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