GBP/USD: Upside remains capped near 1.3070 amid Brexit stalemate

Bulls remain wary amid a lack of progress on Brexit talks, as talks with Labour resume today?
European leaders demand a reason for the prolongation, May seeks for shorter Brexit extension.
Technical set up points to bearish bias, as the focus remains on Wednesday’s EU Summit, FOMC minutes.

Dhwani Mehta FXStreet

The GBP/USD pair stalled its recovery near 1.3070 and entered a phase of consolidation in the European session, as the bulls await a breakthrough on the Brexit talks between the UK PM May and the opposition Labour Party Leader Corbyn, as the talks resume later today.

In this regard, the UK Foreign Secretary Hunt was quoted as saying that the Brexit talks between both the leaders are not going to be easy, pleasing the GBP sellers further. However, the UK Labour Brexit Spokesman Starmer said that the talks are not scheduled today.

The Cable also faces a double whammy as the European leaders remain divided on a potential longer Brexit extension, as they call for an extension until March 2020. In the view of Yohay Elam, Senior Analyst at FXStreet, “Germany is the "good cop" with Chancellor Angela Merkel showing empathy, and France is the bad cop, with President Emmanuel Macron taking a tough stance despite his country's vulnerability to a hard-Brexit due to deep commercial ties.”

The spot remains vulnerable and could retest the 1.3000 level amid a lack of clarity on the Brexit issue while the EU Summit on this Wednesday, April 10^th could help end the Brexit impasse. For now, it looks that the UK will exit the EU this Friday without a deal, with increased Brexit angst to weigh negatively on the GBP.

Meanwhile, a broadly weaker US dollar amid negative Treasury yields, fuelled by risk-aversion, continues to lend some support to the GBP/USD pair. Markets closely watch out for fresh Brexit developments and the US factory orders data for near-term trading opportunities.

GBP/USD Technical Levels

GBP/USD

Overview
Today last price	1.3052
Today Daily Change	0.0016
Today Daily Change %	0.12
Today daily open	1.3036

Trends
Daily SMA20	1.3167
Daily SMA50	1.3097
Daily SMA100	1.2931
Daily SMA200	1.2975

Levels
Previous Daily High	1.3123
Previous Daily Low	1.2987
Previous Weekly High	1.3196
Previous Weekly Low	1.2987
Previous Monthly High	1.3384
Previous Monthly Low	1.296
Daily Fibonacci 38.2%	1.3039
Daily Fibonacci 61.8%	1.3071
Daily Pivot Point S1	1.2974
Daily Pivot Point S2	1.2912
Daily Pivot Point S3	1.2838
Daily Pivot Point R1	1.3111
Daily Pivot Point R2	1.3185
Daily Pivot Point R3	1.3247

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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