The GBPUSD pair continues to react to Brexit related headlines. It did so again today and managed to put a double top as well at the 1.34440 area.
Right at the start of London’s trading, the EU negotiator, Michel Barnier, hinted that the three main Brexit issues are still unresolved – fisheries especially. As such, he doubted the possibility of a deal and expressed concerns that the next 36 hours will be critical.
Let us remember that the UK and the EU agreed to a transition period that ends on December 31st. With a no-deal Brexit, the pound is expected to drop – as it did today on the news.
Cable stopped right where it was supposed to – at dynamic support. The only problem here is that dynamic support held for several times now, and the more the price tests it, the higher the chances that it will break lower.
GBPUSD Technical Analysis
Bears will want to see the pair also breaking the series of higher lows. If that happens, they may want to go short and place a stop-loss order at the double top area. By measuring the distance from the double top and the neckline and projecting it lower, bears can easily find a target for their short trade. All it takes is for the dynamic support level to give way.