GBP/USD had another volatile as top-tier figures competed with Brexit headlines and sent the pair in all directions. What’s next? The final GDP release stands out. Here are the key events and an updated technical analysis for GBP/USD.
Brexit optimism around the Salzburg Summit was shattered when the EU rejected the Chequers proposal outright. The response of UK PM Theresa May was harsh as well, sending the pound down after it had climbed to two-month highs earlier. UK inflation jumped to 2.7%, far above expectations and sent the pound higher. The US went forward with imposing trade tariffs on China but markets took it with a stride pushing the greenback lower.
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
* All times are GMT
GBP/USD Technical analysis
Pound/dollar had a volatile week and it was rejected at the 1.3215 level (mentioned last week). It then climbed higher and hit 1.3300 before plunging back down to the 1.30 handle.
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 bearish on GBP/USD
While PM Theresa May may eventually give in to EU demands, it will come only after the Conservative Party Conference that ends on October 3rd. The upcoming week could see a tough stance from both sides, catering to their audiences.
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