GBP/USD: struggling to regain 1.3900

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3898

Brexit negotiations start heating up ahead of the next round of talks.
USD weakness adding to the bullish case of the GBP/USD pair.

The GBP/USD pair flirts with the 1.3900 level ahead of the US opening, reverting its Friday's losses amid political news in the US, indicating that lawmakers were unable to reach an agreement on the 2018 budget, resulting in the first Government shutdown since 2013. Brexit´s headlines heard these last couple of days were also Pound-supportive, as French President Emmanuel Macron said that the UK future trade deal with the EU should be somewhere between the current full access and a simple trade accord between two independent countries. Later in the day, PM's May spokesman clarified that the UK will leave the EU customs union at some point in the transition process.

Dollar's continued weakness adds to the bullish case of the pair that anyway remains range-bound ahead of the US opening amid the absence of fresh macroeconomic triggers. The 4 hours chart shows that the pair keeps bouncing from a bullish 20 SMA, but also that technical indicators have lost their upward strength and turned lower, with the Momentum now pressuring its mid-line and the RSI barely retreating within positive territory. The downward potential seems well limited, with the immediate support being 1.3830, where the pair bottomed last Friday.

Support levels: 1.3830 1.3800 1.3760

Resistance levels: 1.3940 1.3985 1.4010

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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