GBP/USD: Brexit pours cold water on sterling's rise above ascending triangle

On Wednesday, November 25, a big bulk of US data is set to rock the GBP/USD pair while Brexit botches sterling's surge above ascending triangle, FXStreet’s Analyst Yohay Elam reports.

Key quotes

“Will the EU and the UK strike an accord on future relations? Investors know that 95% is already agreed, but the remaining 5% – fisheries and governance – remain sticking points. Additional headlines are set to rock the pound.” 

“After Tuesday's rally, markets are on pause ahead of a big bulk of US data. Third-quarter Gross Domestic Product will likely be confirmed at 33.1% while October's Durable Goods Orders set to show slower investment growth. The even more frequent weekly jobless claims are also eyed after they disappointed last week. Other figures such as New Home Sales and Personal Spending for October are also awaited.”

“UK coronavirus infections are declining, while the US remains in a dire situation, with yet another new hospitalizations record – over 88,000. Investors seem to have put covid concerns on the backburner.”

“Pound/dollar is trading in an ascending triangle pattern in the past few days. Uptrend support has been running since early November yet the recent rejection just under 1.34 creates the ceiling of this pattern. Technical textbooks suggest a big breakout is on the cards, and this notion is supported by upside momentum on the 4-hour chart and the absence of overbought conditions.” 

“The recent peak of 1.3397 is critical resistance. It is followed by 1.3420 and 1.3510, levels that were in play in August. Support awaits at 1.3310, which capped cable twice this month. It is followed by 1.326 and 1.3245, both stepping stones on the way up.”