- Sterling traders seeing an early pop to 1.3075, but bearish pressures remain.
- Brexit talks are continuing to go nowhere fast, and hope-inspiring words are beginning to run thin for the UK’s political upper crust.
The GBP/USD is trading near 1.3075 heading into London’s Monday market session as investors await further details on Brexit talks between the EU and the UK, and rising concerns of a no-deal Brexit could see the Sterling take a thorough lashing in the weeks to come.
The still-unresolved Irish border dispute remains the core contention between European Union leaders in Brussels and the UK as Brexit talks continue to stall out, and markets are awaiting an expected announcement to come on Tuesday from the UK’s Prime Minister Theresa May, who is slated to address the UK’s parliament tomorrow in a bid to shore up political support back home. PM May is expected to try and soothe flaring political tempers amongst the UK’s Eurosceptic parliamentary crowd, insisting that talks between the UK and EU leaders in Brussels are “95% complete”, despite a continued swamp-out on Irish border discussions.
Monday sees a very thin start to the week, and traders will be keeping their eyes turned to the meatier data docket due in the latter half of this trading week, though headlines will be sure to drive broader market sentiment for the next few days as political tensions continue to keep bulls off-balance.
GBP/USD levels to watch
Despite the odd bullish push here and there, the Cable remains in a fairly bearish technical position, as noted by FXStreet’s own Valeria Bednarik: “from a technical point of view, the GBP/USD pair finished modestly lower for a second consecutive week, maintaining a neutral stance according to the daily chart, where it closed below a flat 20 DMA and as technical indicators hover around their midlines without clear directional strength. Shorter term, and according to the 4 hours chart, the pair is bearish, as it failed to recover ground above a flat 200 EMA, while an early rally was rejected from selling interest around a bearish 20 SMA. Furthermore, technical indicators in this last chart have lost upward strength well into negative ground and after correcting oversold conditions. A break below 1.3010 could result in a bearish continuation toward 1.2880 during the upcoming sessions, the 61.8% retracement of the 2016/18 rally.”
Support levels: 1.3010 1.2980 1.2945
Resistance levels: 1.3085 1.3130 1.3175
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