GBP/USD: saved by the gong, but upward potential limited

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3019

The GBP/USD pair suffered a major setback at the weekly opening, gapping lower on Brexit headlines. Brexit Minister, David Davis, has menaced over the weekend to leave the negotiation table if the EU insists on a divorce bill that can ascend up to €100 billion. The pair fell to an intraday low of 1.2965, but turned suddenly north on EUR's recovery, rather signaling dollar's weakness than resurging demand for the Pound. Prime Minister Theresa May is scheduled to speak in a televised interview later during the US session, and her words over Brexit´s negotiations will likely keep the pair in the move. From a technical point of view, the pair is neutral, as long as it remains confined within last week's range. In the 4 hours chart, the price has pretty much held above a bullish 20 SMA, but the RSI indicator heads nowhere around 58, while the Momentum heads south below its 100 level, also indicating the absence of buying interest. At this point the pair needs to surpass 1.3060 to be able to regain its upward strength, while below the mentioned low, the risk turns towards the downside, although with limited chances of a break below 1.2900 amid persistent dollar's weakness.

Support levels: 1.3000 1.2965 1.2930

Resistance levels: 1.3060 1.3110 1.3150

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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