- Summary:
- The GBP/USD pair could drop to 1.3350 if it moves below the middle line of the Bollinger bands. Brexit and the house price index will be the key drivers
The GBP/USD is tilting lower today as traders look ahead to an important week on Brexit. The GBPUSD is trading at 1.3421, which is 0.85% lower than last week’s high of 1.3540.
After stalling last week, talks between the United Kingdom and the European Union restarted during the weekend after a phone call between Boris Johnson and Ursula von der Leyen.
And, according to The Times, Angela Merkel and Emmanuel Macron talked and agreed to lower some of their demands. They will now forward the new final offer to Boris Johnson.
Analysts are optimistic that the two sides will ultimately reach a deal before the December 31st deadline. Furthermore, the UK government agrees that leaving the bloc without a deal will lead to irreparable damage to the economy. Indeed, the impact of the delayed talks has seen banks like Goldman Sachs shift their funds from the UK.
Looking ahead, the GBP/USD will today react to the house price index data by Halifax, the company owned by Lloyds. Economists expect that the data will show that the index rose by 0.5% in November, an improvement from 0.3% in the previous month.
Meanwhile, the risk-on sentiment in the market is also affecting the GBP/USD price. Earlier today, data from China showed that the country’s exports soared by 21.1% in November while imports rose by 4.5%.
GBPUSD technical outlook
On the four-hour chart, we see that the GBP/USD has pared-back some of the gains made last week. It is trading at 1.3421, which is along the middle line of the Bollinger Bands. It is also between the ascending channel that is shown in yellow.
Therefore, a strong move below the middle line of the bands will be a signal that bears are prevailing. As a result, this will see the pair continue falling, with the next target being at the lower side of the channel at about 1.3350.
GBP/USD technical chart
