GBP/USD Forecast: selling the rallies

Valeria Bednarik FXStreet

Broad dollar's weakness was not enough to offset Brexit fears, resulting in the GBP/USD pair falling down to 1.2139 this Friday, after trading as high as 1.2316 in the previous day. The pair bounced modestly from the level, still in the red weekly basis. On Thursday, the pair retreated on news that Theresa May will deliver a Brexit speech next Tuesday put investors in alert. The PM will likely set out the guidelines of the government's Brexit strategy, ahead of the court ruling on whether the Parliament should be given or not, a vote on the timing of the start of Britain's exit from the EU.

No trading around 1.2190, the 4 hours chart shows that the price is struggling around a horizontal 20 SMA, whilst technical indicators are posting modest bounces from their mid-lines, lacking enough momentum in the short term. Upcoming US data will likely define the tone for this last trading day of the week, although advances are still seen as selling opportunities, once the dust settles on the bullish intraday trigger.

A recovery above 1.2210 could see the pair extending its gains up to 1.2280, with further upward momentum exposing 1.2330 a major static resistance level where selling interest is expected to resume. Below 1.2140, the daily low, the decline will likely extend down to 1.2080, whilst beyond this last, 1.2037, the weekly low comes next.

View live chart of 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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