GBP/USD analysis: waiting for Brexit definitions

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2731

UK Parliament to vote on Brexit plan next Tuesday.
Multiple UK macroeconomic releases this week to be overshadowed by Brexit headlines.

The GBP/USD pair closed the week unchanged near yearly lows, having been ignored by market participants throughout the week, ahead of the critical UK Parliament vote on Brexit next Tuesday. The Parliament has started its debate last week, and multiple votes against PM May's will have fueled speculation that MPs won't approve the deal as it is, bringing negotiations to square one four months ahead of the divorce date. PM May, through its spokesman, have repeated several times that there's no alternative to the signed deal and that there's no intention of extending Article 50. The UK is having quite a busy macroeconomic calendar also, starting Monday with October Industrial Production, Trade Balance and monthly GDP.

The pair hit this week 1.2657, surpassing its previous 2018 low by a couple of pips and a level last seen in June 2017. Spikes through 1.2800 were quickly reverted, with the weekly high having been established at 1.2839. The daily chart shows that it broke the daily descendant trend line coming from November high through lateralization, invalidating the relevance of the break. In the mentioned chart, a bearish 20 SMA has rejected advances, while technical indicators resumed their declines within negative ground, keeping the risk skewed to the downside. Shorter term, and according to the 4 hours chart, the pair offers a neutral-to-bearish stance, as it closed a few pips below a flat 20 SMA, as technical indicators maintain downward slopes below their midlines.

Support levels: 1.2695 1.2660 1.2620

Resistance levels: 1.2775 1.2805 1.2840

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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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