GBP/USD set for a challenge of 1.3000, lagging UK retail sales clouding the picture

Despite a bullish push to end the week, Cable markets remain tense as Brexit uncertainty settles in for the long haul.
PM May may have won her no-confidence vote, but her hands remain tied, with only days to produce an alternative Brexit deal.

Joshua Gibson FXStreet

GBP/USD is trading just south of the major 1.3000 handle as Pound sentiment improves heading into the week's end, with the Cable floating near 1.2980 and sticking near Thursday's closing prices.

Retail Sales data is slated for Friday morning, dropping at 09:30 GMT with December's annualized Retail Sales forecast to hold steady at 3.6%, but the decidedly mid-tier data is unlikely to drive much attention as markets remain focused on Brexit developments.

Prime Minister Theresa May, having survived a no-confidence vote, still faces an unwinnable uphill task, with a deadline of Monday to produce an alternative Brexit withdrawal agreement, or PM May may have no choice but to face a Brexit delay despite her government's vehement opposition to such a move. But in the interest of averting an economic disaster in the shape of a hard Brexit, May's government may face no choice but to face down an extension of Article 50, and the Brexit wheel is set to resume turning over slowly after two years of little to no progress, and the grim reality facing the Cable could see the GBP restrained in the long-term, but in the meantime, Pound traders are enjoying a much-needed bounceback at the tail-end of a tough week.

GBP/USD Levels to watch

Despite Brexit uncertainty set to continue into the future, Sterling traders are beginning to finally push out for more gains, and GBP/USD is set for a bullish continuation according to FXStreet's own Valeria Bednarik:

The pair is technically bullish, approaching the key 1.3000 mark. The 4 hours chart shows that a bullish 20 SMA keeps providing intraday dynamic support, currently at around 1.2870, while the indicator keeps advancing above the 200 EMA, this last modestly bullish over 200 pips below the current level. The RSI indicator in the mentioned chart near oversold levels, while the Momentum maintains a bullish slope well above its midline, indicating the advance may continue during the upcoming sessions.

Support levels: 1.2930 1.2885 1.2840
Resistance levels: 1.3000 1.3035 1.3080

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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