GBP/USD: Closing on 200-day EMA on Brexit optimism

The GBP/USD is closing on the 200-day exponential moving average (EMA) of 1.3264 on Brexit optimism.
Brexit negotiators eye Monday breakthrough, but DUP & staunch Brexiteers may spoil the party.

Omkar Godbole FXStreet Contributor

The GBP/USD pair looks set to extend the three-day winning streak on Brexit optimism, but a break above the 200-day MA may remain elusive if the equities regain poise and put a bid under the US dollar.

At press time, the currency pair is trading at 1.3234, having clocked a three-week high of 1.3247 yesterday.

The momentum studies - 5-day, 10-day, 21-day EMAs - are trending north, indicating a bullish setup. Further, the British and EU negotiators making headway on the Irish border are hoping for a Brexit deal breakthrough on Monday.

Hence, Sterling could test the 200-day EMA, currently located at 1.3264, today. However, a convincing break above that level may remain elusive, as British prime minister's Northern Ireland ally has stoked uncertainty by warning it could vote against her.

Also, the S&P 500 futures are reporting 0.6 percent gains at press time, meaning the equity markets may stabilize, pushing the US dollar higher across the board. However, if the equities continue to slide, then the GBP/USD may peep above the 200-day EMA.

GBP/USD Technical Levels

Resistance: 1.3264 (200-day EMA), 1.33 (Sept.20 high), 1.3363 (July 9 high)

Support: 1.3182 (5-day EMA), 1.3154 (100-day EMA), 1.31 (psychological support)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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