- The week sees the GBP/USD opening relatively restrained, considering the EU’s successful weekend-Brexit summit.
- The Pound’s hope-fueled spike last week may have preemptively robbed the GBP/USD of bullish momentum.
The GBP/USD, testing into 1.2830, kicks off another trading week relatively sedate considering the weekend’s Brexit summit conclusion, which sees the 27-member European Union unanimously agree to the terms of the current patchwork agreement between UK Prime Minister Theresa May and the EU Commission, though specific trade details and the exact mechanisms by which the UK hopes to extricate itself from the European customs union remain elusive, with this weekend’s agreement anaemically light on both topics, and both sides have self-congratulated themselves on ‘a plan to have a plan’.
The Sterling-Dollar pairing is trading stiffly within Friday’s late-session consolidation around the 1.2800 handle, and the pair finds itself still trading within the range set out by Thursday’s massive jump on Brexit hopes, and markets may now be second-guessing their optimism, leaving the GBP/USD to slump within its familiar range rather than continue higher despite the weekend’s successful Brexit talks.
The economic calendar for Monday is thinned out for the GBP, though the Bank of England’s (BoE) governor Mark Carney will be making a speech at 18:30, but the day’s flows are likely to be mostly preoccupied with the flow of Brexit headlines, especially with the uphill climb that awaits PM May within her own parliament, where the odds are stacked against her and her roughshod Brexit proposal.
GBP/USD levels to watch
Via FXStreet’s own Valeria Bednarik, regarding the spreading situation between market hopes and technical readings for the GBP/USD: “from a technical point of view, the pair offers a bearish stance, with the daily chart showing that it spent the week below its 20 DMA currently at 1.2900, while the weekly high was established at 1.2927, making of the area a strong static resistance and a possible bullish target. Technical indicators in the mentioned chart maintain their downward slopes within negative ground, indicating that bears retain control of the pair, and may continue to do so, despite whatever happens with the weekly opening. Shorter term and according to the 4 hours chart, the pair also offers a bearish perspective, developing over 100 pips below a bearish 200 EMA, also below the 20 SMA and while technical indicators head south, the Momentum around its mid-line and the RSI currently at 42.”
Support levels: 1.2765 1.2720 1.2680
Resistance levels: 1.2835 1.2880 1.2930
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