GBP/USD: Cable knocked back to 1.2900 on renewed Brexit anxiety

Hopes for a Brexit deal are beginning to look more baseless as the clock unwinds.
EU-UK divorce talks appear to be unraveling heading into a thin start for the week.

Joshua Gibson FXStreet

The GBP/USD is trading into 1.2930 in the early hours of the new week's markets, and the Sterling saw a bearish gap from last Friday's close of 1.2972 to 1.2910 as Brexit headlines over the weekend took a nose-dive into the fearful end of things, with odds of a last-minute deal ahead of November's hypothetical deadline dead in the water.

Over the weekend: Brexit divergence continues to widen

The UK's Prime Minister, Theresa May, was forced to cancel a last-minute cabinet meeting over Brexit negotations as Brexiteers within the PM's own Conservative party continue to wreak havoc, and EU leaders in Brussels are equally as unimpressed with the UK PM's efforts, and last week's hopes for a last-minute deal are evaporating quickly at the new week's outset, leaving the Cable in a bearish lurch for Monday.

Monday will see a sparsely-populated economic calendar for the GBP/USD, with no meaningful data slated for the UK, and the upcoming US session will likewise see thin volumes with US money markets out for the Thanksgiving long weekend, but Tuesday sees UK Average Earnings in the pipe, and Cable traders will be hoping for an early positive twist to the typical flow of headlines before the key economic data comes in for a landing.

GBP/USD levels to watch

According to FXStreet's own Valeria Bednarik, the Cable could be primed for a technical bullish correction, but long-side action will be limited with the major pair stuck to the mats at key lows: "the daily chat shows that the pair is currently struggling with a mild bearish 20 DMA, as the Momentum indicator hovers around its mid-line and the RSI extends its decline into negative ground, all of which leans the risk toward the downside without confirming it just yet. In the 4 hours chart, the bearish strength is even clearer, as the 20 SMA gains downward traction over 100 pips above the current level, while the pair settled below a directionless 200 EMA. Technical indicators in this last time-frame hold near oversold readings as the pair closed a handful of pips below its weekly low of 1.2957, now the immediate support."

Support levels: 1.2955 1.2920 1.2880

Resistance levels: 1.3000 1.3040 1.3085

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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