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  • GBP/USD has fallen 0.31% in the session as bearishness kicks in.
  • The EU has stated the may ignore the UK PM’s self-proposed deadline.

Fundamental backdrop

It has been a day of mixed messages as at around lunchtime (UK time) there was a headline released stating that the EU are ready to call Johnson’s bluff betting he won’t quit the Brexit talks on 15th October. Then later in the session, Reuters sources suggested the latest round of talks were one of the most positive so far. Talks are set to continue tomorrow and then next week too so it seems we may have not heard the last of this. Today the UK PM tried to rally the troops as he held his virtual online party conference. He noted that things might not be the same ever again after the COVID-19 pandemic but there was not too much news on the Brexit front from the man himself. At least the EU diplomats sounded positive as they said a deal is getting “closer and closer”.

 

GBP/USD 4-hour chart

Looking at the chart it is clear to see the price has bounced off the 1.30 resistance again. If the news was more positive out of the Brexit talks maybe the level would have been broken. One of the other key features on the chart is the ascending wedge type pattern forming. If this breaks to the downside it could mean the lower levels might be tested. The wave low near 1.27 could be the first target for the bears but a break of the pattern represents a nice risk to reward. 

The MACD indicator has turned bearish as the histogram moved into the red. The Relative Strength Index looks like it’s about to break 50 to the downside and lastly, the lagging signal lines on the MACD are also turning lower.

GBP Brexit Analysis

Additional levels