GBP/USD had another volatile week amid Brexit headlines and it managed to pull forward, also thanks to USD weakness. What’s next? Inflation and retail sales numbers stand out. Here are the key events and an updated technical analysis for GBP/USD.
Chief EU Negotiator Michel Barnier moved the pound once again by saying that reaching a Brexit deal within 6-8 is “realistic.” Contradicting reports from various officials maintained high volatility. The UK jobs report beat expectations with a rise of 2.6% in wages. Monthly GDP also came out better than expected in July:0.3%. The Bank of England’s decision was a non-event but Carney was in the spotlight after his term was extended to January 2020 and as he warned about the dire consequences of a no-deal Brexit.
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
* All times are GMT
GBP/USD Technical analysis
Pound/dollar moved higher but and then tackled the 1.31 level mentioned last week.
Technical lines from top to bottom:
1.3375 was a high point in July. It is followed by 1.3315 that capped the pair earlier that month.
1.3215 was the high point for the pair in mid-July and a lower high on the chart. It is followed by mid-September peak of 1.3145.
1.3045 was a high point in August and also close to the initial 2018 low.
Below 1.3000 we find 1.2935, a high point in late August. 1.2865 separated ranges in late August. Further down, 1.2790 served as support late August and also beforehand.
1.2750 held the pair down when the pair was on the back foot. The current 2018 trough at 1.2660 is the next level.
1.2590 was a swing low in September 2017. Even lower, 1.25 is a round number and also worked as support in early 2017.
I am neutral on GBP/USD
While the EU is not being really flexible on Brexit, they are making the right noises and this keeps the pound bid against the strength of the US Dollar.
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