GBP/USD: Bulls nervous ahead of the Dec 4 Brexit deadline, UK PMI

DXY advance caps further upside.
Eyes on the Dec 4 Brexit deadline.
The UK construction PMI to arrive firmer.

Dhwani Mehta FXStreet

The GBP/USD pair failed yet another attempt to survive above 1.35 handle, sending the rates lower to now consolidating around 1.3470 levels, as we gradually head towards the European open.

GBP/USD: 1.3500 still in sight?

Amid a renewed bout of buying interest seen around the US dollar across its main peers, the rebound in the spot lost steam, as the US Treasury yields rallied hard on Senate's approval of tax reform plan, while the faulty ABC report on former National Security adviser Flynn also underpinned the sentiment around the buck.

However, the focus now shifts towards the Brexit issue, as the Dec 4 Brexit deadline imposed by the EU’s Tusk for the UK to bring an improved offer to the table looms, which is expected to set the tone for the pound in the coming days.

Also, of note for the major remains the UK construction PMI report and US factory orders data due on the cards later on Monday.

GBP/USD Technical Levels

“GBP/USD remains on a healthy uptrend despite the higher USD on the passing of the Republican tax bill package. Buying on dips remains the most sensible strategy as per technicals,” Ivan Delgado, Chief Editor at FXStreet notes.

According to Valeria Bednarik, Chief Analyst at FXStreet: “In the 4 hours chart, the pair bounced twice from a bullish 20 SMA, currently around 1.3450, also Friday's low. In the same chart, technical indicators have corrected overbought conditions, now holding flat above but near their mid-lines. The same chart shows that the pair is stuck around the 23.6% retracement of the latest bullish run, while the next Fibonacci support, the 38.2% retracement, stands at 1.3420, with a break below this last opening doors for a steeper correction. Support levels: 1.3450 1.3420 1.3380. Resistance levels: 1.3505 1.3550 1.3590.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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