Risks seem skewed to the downside amid Brexit concerns

• GBP / USD continues to face resistance at the 100 hourly SMA.
• A possible bearish flag is drawn on the 1 hour chart.
• The UK says no to more trade talks with the EU. Fears of a no-deal Brexit persist.

GBP / USD is in a consolidation phase to the downside early in the European session on Tuesday, just below the 1.2950 level awaiting further Brexit news for further momentum.

The pair rose to 1.3032 the day before on expectations of a Brexit breakthrough ahead of the new round of talks between EU chief negotiator Michel Barnier and his British counterpart David Frost.

However, the bears came back and sent the pair down nearly 100 pips below the 1.2940 region after Frost said the UK sees no basis for resuming trade talks with the Union unless there is a fundamental change in. the Brussels approach. The saga still continues with the final Brexit deadline set at December 31.

Technically, the pair has confirmed a breakout of the descending triangle on the 1 hour chart, opening doors for a move towards 1.3100.

On its way to the upside, consolidation after Monday’s dip has created a possible bearish flag pattern on the 1-hour chart. A test of the 1.2850 levels is expected in the short term if the pattern is confirmed at an hourly close below 1.2938.

Before the 1.2850 price target, the 1.2900 support will challenge bears’ commitment.

On the other hand, a sustained break above the 100 hourly moving average could point to the resistance of the uptrend line at 1.2961.

Acceptance above that level would point to a retest of the 200 hourly SMA, now at 1.2970.

GBP / USD 1 hour chart