- GBP/USD is closing on trendline connecting the Aug. 15 low and Oct. 4 low. A close below that would embolden the bears.
- The Brexit impasse is hurting the British Pound. The UK Prime Minister May will likely have a tough time selling an extension to the Brexit transition period at home.
The GBP/USD pair fell to 1.3015 and could further to key trendline support today on the Brexit impasse.
At press time, the currency pair is trading at 1.3021 and the support of the trendline connecting the Aug. 15 low and Oct. 4 low is located at 1.30. Interestingly, 1.30 is also the 76.4 percent Fib retracement level of the rally from 1.2921/1.3258.
UK's Theresa May signaled yesterday that she would consider extending the transition to allow more time for UK and EU negotiators to solve problems around key issues like the Irish border. Further, the European Commission's Jean-Claude Juncker said that any request for an extension to the Brexit transition period by the UK would be considered "positively" and likely be accepted.
Still, the Pound struggled to pick up a bid in Asia as markets believe that Theresa May will have a hard time selling the extension at home. Moreover, as Reuters report says, May's strategy is being criticized by both sides - Brexit supporters accuse her of making Britain a vassal state while the EU supporters say the offer is the worst of all worlds.
As a result, a bounce, if any, in the GBP/USD, will likely be short-lived. Should the pair close below 1.30, a deeper sell-off to 1.2905 (61.8% Fib R of Aug. 15 low/Sept. 20 high) could be in the offing.
Technical Levels
Resistance: 1.3084 (50-hour EMA), 1.31 (10-day EMA), 1.3147 (100-day EMA)
Support: 1.30 (trendline + 76.4% Fib), 1.2921 (Oct. 4 low), 1.29 (psychological support)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD advances toward 1.1200 on renewed US Dollar weakness
EUR/USD is extending gains toward 1.1200 on Friday, finding fresh demand near 1.1150. Risk sentiment improves and weighs on the US Dollar, allowing the pair to regain traction. The Greenback also reels from the pain of the dovish Fed outlook, with Fedspeak back on tap.
Gold price advances further beyond $2,600 mark, fresh record high
Gold price (XAU/USD) gains positive traction for the second successive day on Friday and advances to a fresh record high, beyond the $2,600 mark during the early European session.
USD/JPY recovers to 143.00 area during BoJ Governor Ueda's presser
USD/JPY stages a recovery toward 143.00 in the European morning following the initial pullback seen after the BoJ's decision to maintain status quo. In the post-meeting press conference, Governor Ueda reiterated that they will adjust the degree of easing if needed.
Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum
Shiba Inu remains strong on Friday after breaking above a symmetrical triangle pattern on Thursday. This breakout signals bullish momentum, further bolstered by a rise in daily new transactions that suggests a potential rally in the coming days.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.