Forex Update: GBP Still Under Brexit Pressure
By Dmitriy Gurkovsky, Chief Analyst at RoboMarkets
The British Pound (GBP) is heavily involved into Brexit issues. Last week, the British currency went on a roller coaster ride in light of the Brexit news. This is not over yet, neither for Brexit, nor for the pound.
Last week’s EU summit granted a Brexit extension to the UK. The House of Commons still has to accept the EU Brexit note before March 29 in order to extend the deadline till May 22. Otherwise, the extension will be valid up to April 12 only, and the UK will have to push the hard Brexit in.
In case the longer extension scenario is achieved, the UK will have to take part in the European Parliament elections. This is a thing to avoid for the UK, but there are more things other than the elections to come.
The Bank of England decided to leave the key rate unchanged at 0.75% last week, which was quite in line with the expectations. The economy is barely stable, with everything waiting on the outcome of Brexit.
Technically, the GPBUSD has tested the midterm ascending channel support after the MACD divergence, which is signaling a correction downtrend is coming. The current resistance is at $1.3235, and once it gets broken out, the uptrend will likely continue. The descending move target is at the short term channel support, or $1.2930, while the major target is the projection channel support at $1.2550.
On H1, the pair is correcting upwards and testing the resistance area, which may lead to the price hitting the major support at $1.3100, which, in its turn, will push the midterm scenario in.
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.