GBP/USD Price Analysis: Risks appear skewed to the downside amid Brexit woes

• GBP/USD continues to confront the 100-HMA fencing.
• A potential bear flag is carved out on the hourly chart.
• UK says no to more EU trade talks; no-deal Brexit fears persist.

GBP/USD is in a downside consolidation phase in early Europe this Tuesday, hovering around 1.2950 awaiting a fresh update on Brexit for fresh impetus.

The spot rallied as high as 1.3032 on expectations of a Brexit breakthrough ahead of the fresh round of talks between the EU Chief Brexit Negotiator Michel Barnier and his British counterpart David Frost.

However, the bears returned and knocked-off the pair nearly 100-pips lower to near 1.2940 region after Frost said that the UK sees no basis to resume trade talks with the Union unless there is a fundamental change in approach from Brussels. The saga still continues with the final Brexit deadline set on December 31.

Technically, the spot has confirmed a descending triangle breakout on the hourly chart, opening doors for a rally towards 1.3100.

On its way north, the consolidation following Monday’s sell-off has carved out a potential bear flag pattern on the hourly chart. A test of 1.2850 levels is due on the cards in the near-term should the pattern get confirmed on an hourly closing below 1.2938.  

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

Alternatively, a sustained break above the 100-hourly moving average (HMA) could expose the rising trendline resistance at 1.2961.

Acceptance above that point would call for a retest of the 200-HMA, now placed at 1.2970.

GBP/USD: Hourly chart

GBP/USD: Additional levels