GBP/USD Forecast: Near weekly highs, technical divergences cap

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2342

BOE’s Saunders said he would not rule out negative rates, neither necessarily rule them in.
UK’s Chief negotiator Frost hopes for constructive progress at the next round of Brexit talks.
GBP/USD rally stalled ahead of a critical threshold, amid investor’s caution.

The GBP/USD pair benefited from the dollar’s sell-off, recovering the ground lost on Wednesday and returning to above 1.2300 levels. With no data coming from the UK, the focus remains on the BOE and post-Brexit talks. Early in the day, BOE’s Saunders said he had nothing to add to what Governor Bailey said on negative rates. "I would not rule out negative rates, that does not mean I would necessarily rule it in," Saunders added. On the Brexit front, UK's chief Brexit negotiator David Frost said he was hoping that they could make some constructive progress at the next round of talks scheduled for the upcoming week, although he acknowledged there are some severe issues in the way.

GBP/USD short-term technical outlook

The GBP/USD pair holds on to daily gains, although the 4-hour chart shows that the intraday rally stalled once again ahead of the 200 SMA. The pair is above its 20 SMA, which advances above the 100 SMA, somehow indicating a limited bearish scope. Still, the Momentum has crossed its mid-line into negative ground while the RSI lost its bullish strength and hovers around 63, a sign of easing buying interest at the current level, amid caution ahead of Brexit definitions.

Support levels: 1.2200 1.2160 1.2115

Resistance levels: 1.2285 1.2330 1.2365

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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