GBP/USD analysis: trying to stabilize not out of the woods yet

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2852

A no-confidence vote on PM May seems to have cooled down.
Brexit chaos keeping the upside limited despite dollar's broad weakness.

The GBP/USD pair closed the day little changed around 1.2850, still posting a higher high and a higher low daily basis, on increasing speculation that Tories' rebels won't get the 48 letters needed to challenge PM May's leadership. Risk-off was fueled at the beginning of the day but some headlines indicating that the amount of no-confidence letters submitted were up to 40, but there was no confirmation on those beyond the 26 public backers. UK PM May warned Tories that a no-confidence vote on her will equal a no-deal Brexit. This Tuesday, the UK will see the Treasury Committee presenting the Inflation Report Hearing with comments from BOE's Governor Carney taking center stage. The kingdom will also see the release of the CBI Industrial Trends Survey-Orders for November.

The pair has stabilized but this quietness could be a temporal illusion, given Brexit-related governmental chaos. The pair traded as high as 1.2883, where the pair has the 61.8% retracement of the 2016/18 rally a level that had probed strong in the past. The upward potential is limited also in the short term, as, in the 4 hours chart, the pair has been unable to settle beyond a strongly bearish 20 SMA which continues moving away from the 200 EMA. The Momentum indicator in the mentioned chart aims higher in neutral territory, but the RSI remains flat around 46, offsetting the potential of the first.

Support levels: 1.2810 1.2765 1.2725

Resistance levels: 1.2845 1.2890 1.2530

View Live Chart for the GBP/USD

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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