GBP/USD analysis: heavy, but further declines not yet confirmed

GBP/USD Current price: 1.3320

Disappointment over Brexit negotiations' progress undermines Pound.
BOE's Governor Carney to speak about the Financial Stability Report before a special committee.

The GBP-USD pair closed in the red for a second consecutive week, with the Pound undermined by Brexit uncertainty. The EU leaders agreed to move to the next phase of Brexit talks at a summit in Brussels on Friday, although talks are expected to begin next March. The statement issued by EU negotiators indicated that they can now discuss transitional arrangements and future relationships, although trade was not mentioned. Furthermore, the EU Council expects the UK to adopt the new EU laws that could surge during the transition period, something that will now require the approval of the UK Parliament to come into effect. PM May will have to battle on two fronts to take the UK out of the EU. The most relevant event this week in the UK, beyond Brexit, will be BOE's Governor Carney, due to speak about the latest Financial Stability Report before a select committee. The daily chart for the pair shows that technical indicators have turned sharply lower, entering bearish territory, but also that the price holds far above its 100 and 200 SMAs, with the shortest now around 1.3230. Shorter term, and according to the 4 hours chart, the risk has lean towards the downside, as technical indicators entered negative territory, although with the downward momentum easing, while the decline accelerated on a break below the 100 SMA, and neared the 200 SMA, now a relevant support at 1.3285.

Support levels: 1.3310 1.3285 1.3230

Resistance levels: 1.3360 1.3400 1.3445

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