GBPUSD Eyes Support at the Bottom of Descending Channel on Brexit Concerns and Syrian Attacks

GBPUSD
GBPUSD

GBPUSD is still under selling pressure today as no-deal Brexit fears and risk aversion continued to linger in the markets. The currency pair slid from its Asian session highs at 1.2896 to bottom at 1.2869.

Yesterday, British politician Michael Grove said that the government should withdraw from negotiation talks with the EU if “good progress” is not made by June. Consequently, these remarks sparked concerns that the UK may end up with a no-deal Brexit which could have adverse effects on the British economy.

GBPUSD also saw some selling early in today’s Asian session on news that conflict in the Middle East is on the rise. Turkey reportedly sustained 33 casualties after the Syrian government launched an airstrike in Idlib. If tensions continue to rise, it could spark geopolitical uncertainty because allies of the two countries (Russia for Syria and the US for Turkey) have already affirmed their allegiances in the wake of the incident.

It does not help higher-yielding assets that there still has not yet been any news regarding an effective way to contain the coronavirus.

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GBPUSD Outlook

On the 4-hour time frame, it can be seen that GBPUSD has been trading on a descending channel. As of this writing, the currency pair is trading in the middle of the channel. If sellers maintain their momentum, we could soon soon see GBPUSD fall to the bottom of the channel at 1.2830.

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The hourly chart also suggests that the currency pair may soon resume its fall. A bearish pennant has formed with GBPUSD consolidating after a drop. A break of yesterday’s low at 1.2858 could trigger a move downward.

On the other hand, if buyers take over, the currency pair could trade higher to resistance at the top of the channel at 1.3000.More content