The GBPUSD, which initially started the day on a bullish note, has pulled back after comments from the UK Prime Minister’s spokesman late Friday. The spokesman indicated on Friday that trade talks with the EU were over. He was quoted as saying that the EU’s Chief Brexit Negotiator Michel Barnier would only be welcome in London if he was prepared to talk about the practical aspects of haulage and travel, as well as the legal basis for all outstanding issues.
European Commission President Ursula von der Leyen also said that the EU was ready to make a deal with the UK, but not at any cost, and indicated that the negotiating team would still head to London to intensify the negotiations.
These comments have soured sentiment on the GBPUSD, edging it lower from intraday highs. The pair is still up on the day at 1.29220.
Technical Outlook for GBPUSD
The harmonic pattern with the rejection of price at the 1.30554 resistance seems to be a trigger for the downside move from that level. So far, this move has found support at 1.28589 price level. The bounce from this level is capped at 1.29469, which puts 1.28589 under pressure. A breakdown of this level targets 1.27558, with 1.26374 and 1.25843 lining up as additional targets to the south.
On the flip side, a recovery above 1.30554 targets 1.31754, with 1.33193 and 1.34765 lining up as additional targets to the north. Recovery of the GBPUSD pair requires a higher close above the 1.34765 high.
GBPUSD Daily Chart