GBP/USD enjoyed some Brexit optimism but the global gloom kept the pair’s gains limited. What’s next? PMI data and a testimony by Carney stand out Here are the key events and an updated technical analysis for GBP/USD.
Michel Barnier, the EU’s Chief Negotiator, surprised by saying the EU is ready to offer the UK a deal “like no other country.” The pound jumped on the surprising burst of optimism. Later, things calmed down as there is still a lot of work to do. Moreover, Trump drive to fight trade wars with everybody weighs on markets and sent the US Dollar higher. The optimism from the deal with Mexico faded as he intends to go all in on China, reopened the spat with the EU and is tough on Canada.
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
* All times are GMT
GBP/USD Technical analysis
Pound/dollar was on the move, topping 1.300 at one point but stopped short of the 1.3000 level mentioned last week.
Technical lines from top to bottom:
1.3215 was the high point for the pair in mid-July and a lower high on the chart.
1.3100 was a swing low in mid-June and 1.3050 was a previous 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 remain bearish on GBP/USD
Brexit is biting and the optimism is not based on any details. Alongside Trump’s trade wars, there is more room to the downside than to the downside.
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