GBPUSD Price Technically Weak Ahead of Crucial Brexit Talks
GBP price, news and analysis:
- The coming weekend will be of major importance for Sterling traders.
- Ahead of it, GBPUSD is looking technically weak so a slide lower is possible.
Brexit talks crucial for GBP outlook
A crunch weekend for the Brexit negotiations between the UK and the EU is fast approaching and the outcome of the talks will be of major importance for the GBPUSD price, with an agreement positive for the Pound and no agreement negative.
Ahead of those negotiations, the GBPUSD chart is looking weak so, from a technical perspective, the bias is to the downside.
GBPUSD Price Chart, Daily Timeframe (August 23 – November 22, 2018)
As the chart above shows, the GBPUSD price has broken downwards from a symmetrical wedge pattern, suggesting further weakness ahead. For the past week it has been consolidating below the wedge-pattern support line and any further decline would bring the recent lows into focus: 1.2696 touched on October 30, 1.2700 reached on October 31 and at November 15’s 1.2724.
With the price already below the 50-day, 100-day and 200-day moving averages, a new downtrend is already in place and any fall in the 50 dma below the 100 dma would emphasize it.
Brexit talks in focus
UK Prime Minister Theresa May will be back in Brussels Saturday to discuss future ties between the UK and the EU ahead of a major EU Summit Sunday. However, German Chancellor Angela Merkel will not attend the Summit unless agreement can be reached before then on vexed issues such as the status of Gibraltar, EU fishing rights in UK waters and UK access to the EU single market. If Merkel does indeed not attend, that could prompt a further decline in GBPUSD and the GBP crosses.
In addition, there is concern that any agreement would not be passed by the UK Parliament, and Northern Ireland’s Democratic Unionist Party – which May relies on for her Parliamentary majority – is against the current plans.
On the upside for GBP, May seems to have beaten off for now a challenge to her leadership, strengthening her hand in the negotiations and potentially GBPUSD too.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.