GBP/USD sees Brexit hopes rising as UK GDP rounds the corner

UK GDP figures to be the key for Pound traders on Monday.
New hopes for Brexit may get the chance to surface as the EU begins to thaw their frigid positions.

Joshua Gibson FXStreet

The GBP/USD is continuing to hold steady just above the 1.2900 level after the pair wound up middling near the technical handle through last week, and renewed hopes for a passable Brexit deal are about to face down Monday's GDP reading for the UK economy.

The EU's lead Brexit negotiator, Michel Barnier, could be getting a new mandate from European Union leaders in Brussels, and the move could show the EU is ready to begin meeting the UK in the middle on key issues amidst the deadlocked negotiation process, and UK Prime Minister Theresa May could get a much-needed break as the UK's PM continues to be stuck in a logjam between immobile EU negotiators and wild-eyed Brexiteers within her own ruling party.

Monday also sees another showing of the UK's GDP m/m indicator, with July's GDP reading slated for 08:30 GMT, and which is forecast to clock in at 0.3% versus the previous month's 0.1%, and bulls will be eager to see a positive reading.

GBP/USD levels to watch

The Sterling may see glimmers of hope for today, but the Pound-Dollar pairing remains firmly in the bearish camp, according to FXStreet's own Valeria Bednarik: "the pair has failed multiple times in its attempts to extend gains beyond the 1.3000 level in the last month but closed the week right above the key 1.2890 region, the 61.8% retracement of the 2016/18 rally. In the daily chart, a bullish 20 DMA converges with the mentioned Fibonacci support, reinforcing it, while technical indicators turned neutral, lacking directional strength around their midlines, signaling that buying interest remains limited. Shorter term, and according to the 4 hours chart, the risk skewed to the downside, as the price is barely holding above a mild bullish 20 SMA, while technical indicators turned sharply lower, now challenging their midlines."

Support levels: 1.2890 1.2845 1.2800

Resistance levels: 1.2945 1.2980 1.3010

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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