GBP/USD holding above 1.30, for now

Sterling sees bearish tendencies as Brexit headlines weigh.
Thin data for the early week sees market sentiment troubled.

Joshua Gibson FXStreet

The GBP/USD is trading near 1.3030 to kick off the new trading week, seeing sluggish sideways movement after a sedate Asia market session ahead of the London open.

The Sterling continues to stoop into two-week lows as Brexit headlines drag the Pound lower, with Prime Minister Theresa May still trying to breathe life into her Chequers proposals, European Union leaders in Brussels remaining stoic and staunch in trade negotiations with PM May, and hard-line Brexiteers within the UK's own parliament threatening to torpedo any successful trade deal PM May manages to reach with the EU, and the continued discombobulation between all parties involved in Brexit sees the GBP beginning to weaken further as hope for a workable soft-landing Brexit once again get washed away by all of the poorly-defined rhetoric.

Monday is a thin showing on the economic calendar, with UK Mortgage Approvals for August (forecast 65.121 thousand, last 64.768 thousand) and Markit Manufacturing PMI (forecast 53.8, last 52.8) at 08:30 GMT, while the US side sees their ISM Manufacturing PMI for September (forecast 60.5, last 61.3) at 14:00 GMT.

GBP/USD levels to watch

As Brexit concerns begin to gather further dark clouds, action to the bearish side is on the upswing, according to FXStreet's own Valeria Bednarik: "from a technical point of view, the risk of a downward extension has increased, as in the daily chart, the pair broke Friday below a bullish 20 SMA, while technical indicators offer strong downward slopes, entering negative territory for the first time in September. Shorter term, and according to the 4 hours chart, the pair is also technically bearish after closing the day a handful of pips below the 200 EMA, and while technical indicators maintain their downward strength in overbought levels. A break through 1.2970, now the immediate support, could result in a steady decline toward the 1.2880 region, where the pair has the 61.8% retracement of the 2016/18 rally."

Support levels: 1.2970 1.2945 1.2900

Resistance levels: 1.3065 1.3100 1.3140

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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