- Summary:
- GBPUSD has recently broken resistance at the falling trendline on the daily time frame. With Brexit talks resuming tomorrow, can it extend its gains?
Just like the rest of the major currency pairs, GBPUSD is trading higher in today’s trading on the back of dollar weakness. GPBUSD is up by 0.27% as it trades around 1.2385. With the EU and UK set to resume Brexit talks tomorrow, can the currency pair sustain its gains?
Over the weekend, EU chief negotiator Michael Barnier spoke about how UK Prime Minister Boris Johnson needs to be more amenable to terms of trade. According to him, the UK has attempted to “cherry pick” some benefits which are part of being part of the EU. However, the country has not shown any willingness to accept the responsibilities that come with them.
Barnier reiterated that while the EU wants a trade deal inked, they will not do so at the risk of destabilizing the EU market.
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GBPUSD Outlook
On the daily time frame, it can be seen that GBPUSD has broken resistance at the falling trendline (from connecting the highs of March 9 and May 1). This recent strength on the currency pair could indicate that there are buyers in the market. If there is enough bullish momentum, we could soon see GBPUSD trade higher to 1.2635 where the currency pair could test the 100 SMA and 200 SMA. This price also coincides with the highs for April 30.
On the other hand, if buyers are not able to sustain the momentum, the currency pair could retrace some of its gains. GBPUSD could fall to 1.2345 where it could face a confluence of support which is apparent on the 1-hour chart. For one, this area coincides with the rising trendline from connecting the lows of May 27, May 28, and May 29. It also aligns with the area between the 50% and 61.8% Fib levels when you draw the Fibonacci retracement tool from the low of May 29 to today’s high.