GBP/USD cautiously pushing into 1.3150 despite fresh Brexit concerns

Dollar-selling in the wider market is seeing the GBP/USD pair on the rise, but Brexit concerns continue to eat away at confidence in the Pound.
A thinly-populated economic calendar for Monday will see Brexit woes in control of the major pair's overall directional bias as the new week opens up.

Joshua Gibson FXStreet

The GBP/USD pairing is drifting towards the high side, testing into 1.3150 after taking out Friday's highs in early Asia-session trading, despite a bearish knockback to kick the week off as the latest Brexit proposal from the UK sees little traction with EU leaders.

European Union leaders in Brussels have flat-out rejected UK Prime Minister Theresa May's latest "third option" Brexit proposal; under PM May's hopeful middle-ground proposal, the city of London would have enjoyed permanent access to European financial markets, which would rob the EU of decision-making autonomy, as market access to EU-wide markets is a privilege that the broader EU holds the right to rescind at any time. With the latest hotly-debated Brexit proposal now dead in the water with European leaders, Brexiteers are back to the drawing board as PM May struggles to find an acceptable common ground between hard-line Euroskeptics in the UK's parliament, and the keyholders of the European Union, who have little need to make concessions to the UK's demands.

Monday is a thinly-populated schedule for economic data, with little of note for both the Sterling and the Greenback, though a speech from the Bank of England's MPC Member Haldane is expected later in the day at 17:00 GMT, while m/m June Existing Home Sales figures for the US are expected at 14:00 GMT, and expected to improve slightly to 5.47 million, slightly higher than the previous reading of 5.43 million.

GBP/USD Levels to watch

A steeply-bearish British Pound continues to be hampered by Brexit concerns, abd broad-market USD-selling is seeing the pair rise, as opposed to intrinsic strength from GBP bids, which remains non-existent. According to FXStreet's Chief Analyst, Valeria Bednarik: "the daily chart indicates that bears are still in control of the pair, as the latest recovery stalled below its 20 DMA, while technical indicators have managed to recover some ground, but remain in negative territory. In the 4 hours chart, the pair settled above a sharply bearish 20 SMA, still some 150 pips below the 200 EMA, while technical indicators stand well above their midlines, but lost their upward strength. The pair could continue advancing on a break above 1.3155, the immediate resistance, although the first line of sellers should appear around the 1.3200 figure. Renewed selling pressure below the 1.3100 level, on the other hand, will likely favor additional declines for this Monday, toward the key 1.3000 psychological threshold."

Support levels: 1.3100 1.3065 1.3030

Resistance levels: 1.3155 1.3195 1.3240

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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