- Treads water ahead of the Barnier – Raab’s meeting on Brexit.
- Risk-aversion caps upside attempts to test the 1.3050 barrier.
The GBP/USD pair continues to trade cautiously so far this Friday, as markets remain unnerved ahead of the Brexit meeting scheduled later today between the EU’s Chief Brexit Negotiator Barnier and the British Brexit Secretary Raab.
The bulls remain expectant of some optimistic outcome from the meeting, which could highlight further progress on the Brexit talks. The renewed Brexit optimism is mainly driven by Thursday’s upbeat comments by Barnier. The EU official said that the EU is ‘prepared to offer a partnership with Britain such as has never been with any other country’.
Meanwhile, the upside in Cable also remains capped, as mounting global trade war fears and Emerging Markets (EM) crisis reduce the demand for higher-yielding assets such as the GBP. Risk-off remains the main theme in Europe, as reflected by the tumbling European equities and negative oil prices.
Looking ahead, the pair could regain fresh momentum on the back of fresh Brexit-related developments, as the US docket remains relatively light for today.
GBP/USD Technical Levels
According to Yohay Elam, FXStreet’s Analyst, “1.2980 was a low point on August 30th. Further down, 1.2935 held the pair down on several occasions in late August. 1.2850 was a low point before the most recent surge. 1.2800 is a round number that also served as support in mid-August. Lower, 1.2730 and 1.2760 were the limits of a narrow range in mid-August. 1.3040 was a high point on August 30th and also coincides with the 50-day Simple Moving Average. 1.3080 provided support to the pair in late July and early August. 1.3175 was a swing high in late July, and 1.3220 had a similar role around the same time.”
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