GBP/USD consolidates below 1.29 and key resistance structure


  • GBP/USD holding offer the bears but struggles below key resistance.
  • Brexit keeps the bulls at bay and US stimulus hopes pressure the greenback.

GBP/USD is currently trading at 1.2885 and between a range of 1.2819 and 1.2978 on the day.

Brexit remains in focus and GBP has weakened on suggestions the latest round in negotiations has hit a snag. 

The EU has begun legal proceedings against the UK after the Kingdom's PM, Boris Johnson, outlined plans to breach the terms of its Brexit divorce deal with the EU and therefore break international law. 

''We had anticipated a souring of the week’s earlier tone and think GBP should continue to lag its peers near-term. Further out, however, we think sterling has a lot of bad news in the price and wonder if downside risks for cable of a No Deal outcome are starting to diminish,'' analysts at TD Securities explained.

The UK has one month to respond to the legal challenge while the negotiations continue.

''The decision by the UK to ignore international law sets a dangerous precedent, adding uncertainty to not only Brexit but also global stability. It undermines the power of the WTO,'' analysts at ANZ bank explained. 

However, both sides say a deal is in sight despite that they are struggling to reach an agreement on some key issues.

One of the major issues is around the UK's ability to use state aid in order to prop up British businesses. The EU says this could give British companies an unfair advantage over EU companies. Disputes over fishing rights and governance are also preventing headway.

Meanwhile, the US dollar was pressured to a low in the 93.50s as measured by the DXY index as investors juggled hopeful and pessimistic news on the progress of stimulus talks Washington amid signs of waning momentum of economic recovery from the pandemic recession, now entering its ninth month. 

GBP/USD levels

If there is a continuation of accumulation at support, then the case will remain bullish.

However, a break of the structure opens downside risks.  

The US dollar, on the other hand, could be on the verge of a comeback:

 

Overview
Today last price 1.2888
Today Daily Change -0.0033
Today Daily Change % -0.26
Today daily open 1.2921
 
Trends
Daily SMA20 1.2915
Daily SMA50 1.3028
Daily SMA100 1.2751
Daily SMA200 1.2719
 
Levels
Previous Daily High 1.2943
Previous Daily Low 1.2806
Previous Weekly High 1.2967
Previous Weekly Low 1.2676
Previous Monthly High 1.3482
Previous Monthly Low 1.2676
Daily Fibonacci 38.2% 1.289
Daily Fibonacci 61.8% 1.2858
Daily Pivot Point S1 1.2837
Daily Pivot Point S2 1.2753
Daily Pivot Point S3 1.27
Daily Pivot Point R1 1.2974
Daily Pivot Point R2 1.3027
Daily Pivot Point R3 1.3112

 

 

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