GBP/USD was under pressure as Brexit negotiations remain stuck and worries about the economy persist. The upcoming week features the GDP report and also the government’s Autumn Statement. Here are the key events and an updated technical analysis for GBP/USD.
House prices are not going anywhere fast in Britain, but the greater worries come from politics. The EU is getting ready for Brexit talks to crash, while the ruling Conservative Party is experiencing a rebellion. This isn’t good news for the pound. Economic data was mixed: inflation remained at 3% falling short of projections. On the other hand, annual wage gains stand at 2.2%, which is good news but the lack of reaction exposed the weakness of the pound. Retail sales were not terrible and perhaps expectations were too low.
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
GBP/USD Technical Analysis
Pound/dollar kicked off the week with a downfall, slipping to support around 1.3050 mentioned last week before stabilizing.
Technical lines from top to bottom:
The recent cycle high of 1.3620 serves as strong resistance. 1.35 was the post-Brexit high and remains the top level.
It is followed by 1.3370 which capped the pair several times in 2016. The previous 2017 high of 1.3270 is the next barrier. 1.3225 was the high point of September.
It is followed by 1.3180, which capped the pair in July. 1.3120 served as resistance twice in the summer of 2017 and remains important.
Below, 1.3050 is a double top as seen during the spring of 2017. 1.2975 awaits on the lower side of 1.30.
Further below, 1.2890 separated ranges on the way down. It is followed by 1.2820 and 1.2775.
I remain bearish on GBP/USD
It is really hard to be optimistic about the prospects of Brexit talks as well as the future of the May government. In addition, economic indicators are beginning to lean lower.
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