GBP/USD Forecast: Mounting Brexit tensions weighed on Sterling

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2287

UK money-related figures came in mixed in May, with Mortgage Approvals contracting to a third.
Brexit talks between UK Frost and EU Barnier resumed this Monday.
GBP/USD reached a fresh June low of 1.2251, retains the bearish stance.

The GBP/USD pair has extended its slide to a fresh June low of 1.2251, trading sub-1.2300 heading into the Asian session. The UK published May Mortgage Approvals, which were up by just 9.273K from 15.815K in the previous month, and Consumer Credit for the same month, which came it at £-4.597 B against the £-2.5 B expected.

Brexit talks have resumed between UK’s chief negotiator, David Frost, and EU Michel Barnier, with no real progress reported so far. The EU commission spokesman said that their main target for these upcoming weeks is “to intensify our negotiations in order to make progress in getting a deal. Our goal is to make progress and to reach a deal." Mr. Frost, on the other hand, warned the EU must not drag out Brexit talks into the autumn. Tensions weighed on the Pound.

The United Kingdom will publish on Tuesday the final reading of Q1 GDP, foreseen unchanged at 0.0%, ad Business Investment for the same period.

GBP/USD short-term technical outlook

The GBP/USD pair retains its bearish stance in the short-term, despite bouncing some 40 pips from the mentioned daily low. In the 4-hour chart, it is developing below a bearish 20 SMA, which accelerated below the larger ones. Technical indicators have bounced modestly from their daily lows, but remain well into negative levels, far from suggesting further gains ahead. The former monthly low at 1.2314 is now the immediate resistance.

Support levels: 1.2250 1.2205 1.2160

Resistance levels: 1.2315 1.2365 1.2410

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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