Among the higher-yielding major currencies, the British pound is the only only one that is trading lower against the US dollar. GBPUSD is slightly down from its opening price by 3 pips as it trades around 1.2728. The currency pair is under selling pressure on reports that the UK may end up with a no-deal Brexit.
According to a report by the Telegraph, a few UK ministers have expressed skepticism over the current Brexit negotiations. With the end-of-July deadline fast looming, officials think that the UK and EU will not be able to come to a compromise. Certain issues like fishing rights and a level playing field for businesses have previously been reported to cause a deadlock between the two parties.
There are no market-moving reports scheduled for release from the UK and the US today. This means that GBPUSD may be vulnerable to developments surrounding this news in today’s trading.
On the 4-hour time frame, it can be seen that the uptrend on GBPUSD is still pretty much intact. This is evidenced by the fact that the currency pair is still trading well above its trendline (from connecting the lows of June 30 and July 17). A strong bullish close above the high of July 21 at 1.2766 could mean that there are still buyers left in the market. GBPUSD may then trade higher to 1.2812 where it topped on June 10.
On the other hand, if buyers are not able to hold on to their momentum, GBPUSD could give up some of its gains. The currency pair could trade lower to support at 1.2640 where it could test the trendline and the 50% Fib level (when you draw the Fibonacci retracement tool from the low of July 17 to the high of July 21).