- GBP/USD trades 0.26% higher on Monday mostly on greenback weakness.
- There have been some Brexit comments but no real movement yet.
GBP/USD 4-hour chart
GBP/USD has been inching higher on Monday but this is broadly due to some weakness in the US dollar. EUR/USD is 0.61% higher closely followed by 0.55% in USD/CHF and this means the 0.26% move in cable is less impressive. This could be an important week in the pound as after the weekend’s Brexit talks between UK PM Boris Johnson and EU’s Ursula von Leyen, the other delegates discussing key issues leading into the rest of the talks. Just today UK PM spokesman said the two parties need to work a quickly as possible to reach a Brexit agreement by October 15th and if gaps on fisheries are to be bridged we need more realism from the EU.
Looking at the chart, it seems the price is at a critical juncture. The resistance level at 1.30 marked in green has been a strong zone after being tested six times recently. If the price breaks the level it could be an important sign and it might happen if there are some positive Brexit headlines. If there happens to be a rejection at the zone on the downside the bears could lookout for the two support levels at 1.28 (red) and 1.2675 (black).
The indicators are looking bullish at the moment as the Relative Strength Index is above 50. The MACD is also looking bullish as the signal lines are above zero and the histogram is green but only just.
Overall, much will depend on the condition of the US President as he continues his recover from COVID-19. Elsewhere, Brexit news will also be a key driver of price action as it has been in recent times.
Credit: FX Street