GBP/USD Forecast: Waiting for a clearer Brexit picture

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2938

Brexit talks between the EU and the UK remain on pause.
The United Kingdom will release September inflation data this Wednesday.
GBP/USD neutral below the critical 1.3000 threshold, increasingly bearish.

The GBP/USD pair ended the day as it started it, trading around 1.2940, as frozen Brexit talks overshadowed the broad dollar’s weakness. Downing Street has put trade talks with the EU on pause, waiting for Brussels to make concessions. The European Commission has officially stated its willingness to intensify trade talks with the UK, but at the time being, talks are being held by phone. Meanwhile, UK PM Johnson said tougher restrictions would be imposed on the Greater Manchester region in northern England starting on Friday after the country reported 21,331 new coronavirus cases.

The United Kingdom will release this Wednesday, September inflation figures. The annual CPI is foreseen at 0.5%, up from 0.2% in the previous month, while the core reading is expected at 1.3% from 0.9% previously.

GBP/USD short-term technical outlook

The GBP/USD pair has remained below a daily descendant trend line coming from this October high at 1.3082 and currently around 1.3020. The 4-hour chart shows that the pair is trading within all of its moving averages, as technical indicators hold around their midlines without clear directional strength. The pair will likely continue trading uneventfully ahead of Brexit-related definitions, with the bullish potential limited, despite absent demand for the greenback.

Support levels: 1.2940 1.2895 1.2850

Resistance levels: 1.2985 1.3025 1.3060

View Live Chart for the GBP/USD

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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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