GBP/USD Analysis: at risk of losing more ground in the short-term

GBP/USD Current Price: 1.2470

EU and UK making no progress on the Irish backstop issue.
Risk aversion triggered a correction from fresh two-month high.
GBP/USD could keep losing ground on a break below 1.2460, the immediate support.

The GBP/USD pair advanced up to 1.2581, it highest in over two months, but was unable to sustain gains, ending the week around 1.2470. Hopes that the UK and the EU could reach an agreement underpinned Sterling earlier in the week, although the lack of progress in finding a solution to the Irish backstop issue, forced bulls to take some profits out of the table ahead of the weekly close. Risk aversion coming from the trade war front added to the negative tone of the pair. Comments from EU Chief negotiator Barnier were unable to offset the sour mood, after he stated that “work on Brexit continues,” clarifying, however, that the "EU will remain vigilant and continue to apply all EU principles and values. We are determined to try and reach an agreement." The UK has no data scheduled to publish this Monday.

GBP/USD short-term technical outlook

The daily chart for the GBP/USD pair shows that the pair posted a higher high and a higher low on Friday, which keeps the risk skewed to the upside, despite closing in the red. In the mentioned time-frame, the pair is hovering around a bearish 100 DMA while far above a bullish 20 SMA. The Momentum indicator keeps heading north, although the RSI eased within positive ground. In the shorter term and according to the 4 hours chart, the pair is at risk of extending its latest decline, as it settled near its daily low, while technical indicators head south within neutral levels.

Support levels: 1.2460 1.2420 1.2385

Resistance levels: 1.2510 1.2555 1.2590

View Live Chart for the GBP/USD

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