GBP/USD Outlook: Bulls are taking a breather after 3.6% rally and awaiting fresh signals from Brexit talks

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable dips to 1.2555 in early European trading on Monday as traders booked some profits from past two days 3.6% advance, but remain cautious, as further advance could be expected on fresh positive Brexit news.
Renewed optimism for Brexit deal before 31 Oct deadline, pushed pound to 1.2706 on Friday, the highest level since 28 June, with strong rally being so far capped just under significant barriers provided by 200DMA (1.2711) and Fibo 61.8% of 1.3179/1.1958 (1.2713).
Pullback so far looks like positioning for fresh upside action and should ideally find support at 1.2500 zone (near-Fibo 38.2% of 1.2197/1.2706 rally) to keep near-term bias with bulls.
Top EU/UK negotiators described last week's talks as constructive and will hold another round of intense negotiations this week, keeping in play hopes for the last minute deal, which would be approved on EU summit on Thu/Fri this week. However, caution is required despite prevailing optimistic tones, as ‘buy the rumors – sell the facts' scenario cannot be ruled out. Today's pullback so far holds above rising 10DMA (1.2554) with daily indicators pointing lower and signaling further easing, as daily cloud twist next Monday (1.2260) could be also magnetic. Ideal scenario of reversal above 1.2500 support zone would keep focus shifted higher for renewed attack at 1.2711/13 pivots. Break of 1.2500 pivots would risk extended pullback towards 1.2450 (daily Kijun-sen) and 1.2392 (rising 20DMA/Fibo 61.8% of 1.2197/1.2706 Thu/Fri rally).

Res: 1.2580; 1.2615; 1.2645; 1.2706
Sup: 1.2554; 1.2512; 1.2450; 1.2407

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.3067
2. R2 1.2887
3. R1 1.2768
PP 1.2588
1. S1 1.2468
2. S2 1.2288
3. S3 1.2168

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.