GBP/USD capped at 1.2937, pulls back to test 1.2900 area

GBP/USD fails to bounce up past 1.2937 and retreats to 1.2900 area
Pound dives as hopes of a Brexit deal deteriorate.
Westpac sees the GBP/USD trapped between 1.27 and 1.32.

Guillermo Alcala FXStreet

The sterling is looking heavy on Thursday as previous hopes of a Brexit deal with the EU deteriorate. The GBP/USD has depreciated approximately 1% on the day and is testing 1.2900 at the moment of writing.

Brexit deal obstacles hurt the pound

The pound has relinquished Wednesday’s gains against the US dollar as the investors reassess the chances of significant achievements in the Brexit negotiations. With the obstacles between the UK and the EU becoming more evident, namely the differences about fisheries and fair competition and dispute resolution issues, the market starts to anticipate a watered-down-agreement, in case there is any.

Beyond that, the USD has been boosted across the board in a general rush for safety. Investors’ disappointment regarding the remote chances of a fiscal stimulus in the US and the growing concerns about the economic impact of tighter restrictions to curb the second coronavirus wave have crushed appetite for risk, boosting demand for safe-havens like the US dollar and the yen.

GBP/USD: Trapped between 1.27 and 1.32 – Westpac

On a technical level, the Westpac FX analysis team sees the GBP/USD trading back and forth between 1.27 and 1.32: “This week’s EC summit may not find a breakthrough but it may allow for more intense talks on details to begin and so lead to a potential agreement over the coming month. However, uncertainty remains high (…) Within progress on post-Brexit trade or COVID-19 cases, GBP/USD will be range-bound (1.27-1.32).”

Technical levels to watch

GBP/USD

Overview
Today last price	1.2894
Today Daily Change	-0.0119
Today Daily Change %	-0.91
Today daily open	1.3013

Trends
Daily SMA20	1.2894
Daily SMA50	1.3024
Daily SMA100	1.2825
Daily SMA200	1.2711

Levels
Previous Daily High	1.3064
Previous Daily Low	1.2863
Previous Weekly High	1.305
Previous Weekly Low	1.2845
Previous Monthly High	1.3482
Previous Monthly Low	1.2676
Daily Fibonacci 38.2%	1.2988
Daily Fibonacci 61.8%	1.294
Daily Pivot Point S1	1.2896
Daily Pivot Point S2	1.2779
Daily Pivot Point S3	1.2694
Daily Pivot Point R1	1.3097
Daily Pivot Point R2	1.3182
Daily Pivot Point R3	1.3299

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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