Tuesday, October 23, 2018

GBP/USD - 23 October 2018

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Fundamental Highlights

The Pound falls towards the 1.2950 support level following a rise in uncertainty in regards to the outcome of the Brexit negotiations. So far, deal negotiations have been stalled as the EU and UK disagree on the future of the Irish border post Brexit. Alongside other countries in the kingdom, UK officials would like to disintegrate Northern Ireland from custom unions in Europe. However, this poses a risk of a potential hard border to be built on the Irish island. The EU is not accepting a customs disintegration while keeping a soft border, they believe that if a customs disintegration will occur then there should be a hard border between the two Irish countries. For today, the focus will remain on Brexit as it is clearly the main driver of the pair alongside the fact that no significant economic data are set to be released today.

Technical Analysis

The British Pound breaks below the 1.3080 support level and exposes the 1.2960 level amid growing concerns regarding the outcome of the Brexit negotiations. Additionally, the pair rejected the break above the 13-period moving average signaling that the bias of the trend remains bearish. For today, a break below the 1.2921 mark will pave the way for a further drop towards the 1.2840 support level.

Support: 1.2960 1.2840
Resistance: 1.3020 1.3080

Chart (H4)
GBPUSD

 
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