GBP/USD Forecast: Progress in Brexit talks could push it beyond 1.3000

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2978

The UK and the EU kick-started two weeks of intense talks about a trade deal.
UK economic progress continued in September, according to Markit.
GBP/USD is holding on to gains near the critical 1.30 threshold.

The GBP/USD pair traded as high as 1.2991, underpinned by the ruling upbeat mood. The pair not only found support in rallying equities but also in mounting hopes for a breakthrough in Brexit talks. Despite the EU and the UK remaining far apart in some critical issues, UK PM Johnson and EU Commission leader, Ursula von der Leyen had agreed to extend negotiations until October 31, a sign that none of them favors a no-deal exit. Two weeks of intense talks began this Monday.

Earlier in the day, Markit published the final version of the UK Markit Services PMI, which resulted in September at 56.1, better than the previous 55. On Tuesday, Markit will publish the UK September Construction PMI foreseen at 54.1 from 54.6 previously.

GBP/USD short-term technical outlook

The GBP/USD pair holds on to daily gains ahead of the Asian opening trading in the 1.2970 price zone. The 4-hour chart shows that the Momentum indicator eased, but that the RSI indicator holds steady around 61, reflecting the latest range rather than suggesting an upcoming decline. In the mentioned chart, a bullish 20 SMA provided intraday support, currently in the 1.2920 price zone.

Support levels: 1.2925 1.2870 1.2815

Resistance levels: 1.3010 1.3050 1.3085

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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