- GBP / USD is trading flat on the day, with gains apparently limited to the 1.3200 mark for now.
- The stalled Brexit talks remain in the limelight of GBP traders, although the incoming speech from the BoE may briefly steal the spotlight.
GBP / USD is trading flat lower on Monday. The gains from the Asian session that took the pair above the 1.3200 level were erased during the early part of the European session.
Brexit stalemate lingers, but GBP remains resilient
The tone of Brexit events remains pessimistic, and there is still no indication that a deal is close. As has been the case for months, the main sticking points remain in fisheries, state aid and governance. As for the latter, over the weekend, EU sources said there was less progress in recent days on the remaining Brexit sticking points than they expected and that the “moment of truth” is approaching. UK sources confirmed that large loopholes remain.
Going forward, GBP traders will shift their focus to the Bank of England, with speeches from Monetary Policy Committee members Silvana Tenreyro at 16:00 GMT and Jonathan Haskel at 17:30 GMT; Tenreyro offers a webinar on the bank’s monetary toolkit (therefore the British pound might be sensitive), while Haskel participates as a panelist in the Parliamentary Group on Artificial Intelligence “AI Technologies in the recovery of the economy of the Post-Covid-19 UK “(therefore monetary policy comments are less likely and your comments are less likely to move GBP).
GBP / USD breaks Friday’s uptrend, but long-term technical outlook remains bullish
At the start of the European session on Monday, GBP / USD broke below last Friday’s uptrend (see 1-hour chart below), breaking last Friday’s short-term bullish momentum and falling back below. of 1.3200. Confirming the breakout of this trend line, the pair rejected a retest shortly before noon and has since been within a range between the daily lows around 1.3165 and the 1.3200 mark.
Outside this range, most significant support levels are a long-term uptrend linking the lows of November 2, 4, 5 and 13, 2020 (approximately in 1.2850, 1.2920, 1.2940 and 1.3110 respectively), which should come into play around 1.3150. Below 1.3150 are last week’s lows just above 1.3110, as well as the psychological level of 1.3100.
In terms of strength, the 1.3200 is acting as a significant barrier right now, but beyond that, Monday’s high is just above 1.3240, followed by the psychological level of 1.3300 and last week’s high just above.
4 hour chart
1 hour chart
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