GBP/USD analysis: Brexit headlines keep coming, but there's no deal yet

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2968

Mounting speculation of a new UK Brexit´s plan to be discussed this week.
GBP/USD exposed to wild swings amid Brexit uncertainty.

The GBP/USD pair closed the week with gains in the 1.2960 region, recovering from a multi-month low of 1.2690. By the end of the week, however, the pair was unable to sustain gains above the 1.3000 level as the unimpressive US NFP report gave speculative interest a reason to book some profits ahead of the weekly close. Brexit headlines over the weekend have been quite intense and may lead to some gaps in the pair ahead of the weekly opening. There was a report indicating that UK PM May had a plan to remain in a temporary customs union with the EU to avoid a hard border in Ireland. Later, a May's spokesman said that an all-UK customs Brexit deal report is "speculation," denying the previous news. PM May's cabinet is said to meet on Tuesday, to discuss a plan to present the EU before the weekend. Also, The Guardian reported Sunday that more than 50 business leaders have signed a letter advocating a second vote on Brexit.

The UK will release this Monday the October Markit Services PMI expected at 53.3 from 53.9 in September.

Technically, the upward potential for the pair remains limited, as, in the daily chart, the rally stalled around a mild-bearish 20 DMA which continues gaining downward traction below the 200 EMA. In the same chart, technical indicators have recovered from oversold readings, but the advance lost strength within negative ground, with the indicators now turning lower. Shorter term, and according to the 4 hours chart, however, the scale leans to the upside, as the pair is battling around a flat 200 EMA and well above a bullish 20 SMA, while technical indicators stabilized well into positive ground after correcting extreme overbought readings.

Support levels: 1.2935 1.2900 1.2865

Resistance levels: 1.30001.3040 1.3085

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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