GBP/USD to face further Brexit pressure ahead of US GDP figures

The Sterling to face further losses as the GBP/USD accelerates to the downside.
Brexit headlines continue to drive the Cable, and news on the EU-UK split are leaning heavily towards the disappointing side.

Joshua Gibson FXStreet

The GBP/USD is trading into 1.2800 heading into Friday's London market session after accelerating declines out of a bearish channel yesterday following comments from UK Brexit Secretary Domonic Raab who blamed the European Union for the lack of a Brexit deal.

The UK's Raab blamed the EU's "intransigence" on Brexit negotiations for the lack of a deal as talk deadlines rapidly approach, and the lack of any workable deals between the UK and the EU is leaving Pound traders in the lurch, forcing the GBP lower across the board as fears of a no-deal hard Brexit continue to rise, with November's deadline to have a deal in place ahead of March's final Brexit date fast approaching and the two sides seeming to move further apart after months of endless talking-up by representatives on both sides.

The economic calendar leaves the GBP completely unrepresented, and the Cable will be seeing market sentiment holding the reigns to end the week's trading, though US Preliminary GDP figures due at 12:30 GMT today will no doubt see plenty of Greenback-based action, with 2018's third-quarter GDP expected to print at 3.3%, a slight contraction from the previous quarter's 4.1%.

GBPUSD levels to watch

The Cable is set firmly into a bearish downtrend and shows no signs of slowing, and according to FXStreet's Valeria Bednarik: "from a technical point of view, the slump accelerated after the pair broke below the 61.8% retracement of the 2016/18 rally at around 1.2880, and has room to extend its decline, particularly on a break below 1.2785, September monthly low. In the 4 hours chart, the 20 SMA heads south almost vertically far above the current level, while technical indicators are currently losing downward strength but in extremely oversold levels, with no signs of changing course. Some consolidation could be expected, but the bearish potential will be strong as long as the price remains below the mentioned 1.2880 price zone."

Support levels: 1.2810 1.2785 1.2740

Resistance levels:1.2850 1.2880 1.2925

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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