GBP/USD manages to regain 1.3000, Brexit concerns resurface

The GBP/USD pair attempts a minor-bounce and regains 1.30 handle amid persisting risk-averse market conditions and Brexit-related jitters returning to markets.

GBP/USD: Potential rounding top on hourly sticks?

Currently, GBP/USD drops -0.53% to 1.3005, hovering close to fresh two-day lows reached at 1.2989 in the last hour. The cable trims losses, although remains heavily offered as the UK foreign minister Johnson’s latest comments on Brexit process, reinforced Brexit-based concerns into the markets and pulled the GBP deeper into losses. The UK foreign minister Boris Johnson noted that he expects the Brexit process to begin in early 2017.

However, the latest bounce in the major from below 1.30 handle can be solely attributed to stalled recovery in the US dollar against its major peers, with the USD index now erasing entire gains witnessed so far this session, to trade flat around 95.30 levels.

Carol Harmer, Founder at charmertradingacademy.com, noted, “I believe that not for long....We can see GBP/USD or Cable as it is known in FX world....we can see this breaking eventually and to be fair there is no technical reason why we cannot trade higher and go back to the top of the recent weekly trading band at 1.3420..Please do not forget that 1.3420 is still very much historically low for GBP/USD so we are not getting excited thinking the market is going to the moon.”

She adds further, “However the downside....well it is Friday and historically a day that traders do not like to trade much beyond midday or at least until the US open....so keep it all tight for today but still we would favour the market moving up higher rather than lower over the next week.”

GBP/USD Levels to consider            

The pair has an immediate resistance at 1.3085 (10-DMA), above which 1.3100 (round number) and 1.3143 (50-DMA) would be tested. On the flip side, support is seen at 1.2973 (daily S2) below that at 1.2943 (Sept 21 low) and at 1.2900 (key support).