The GBPUSD pair remained firm above the important resistance level of 1.2400 as the market refocused on the new round of Brexit talks.
Brexit talks resume
The economic calendar will be light today, with no major scheduled economic data from the United Kingdom and the US. Therefore, the focus among traders will be on the second round of Brexit talks that will take place this week.
In this round of talks, the negotiators will attempt to solve key issues like fisheries, regulations, and competition between the EU and the UK.
Still, the main challenge is that the two sides have put in place tough stance, which makes it unlikely that a breakthrough will happen.
Worse, Boris Johnson has remained adamant that he will not seek for an extension when the deadline reaches in the end of May. As a result, this could increase chances of a no-deal Brexit on December 31st.
A no-deal Brexit will be negative for the UK as documents from the Bank of England (BOE) and other researchers have found. It will increase trade barriers, increase the cost for businesses, and lead to a smaller UK economy. All this will be negative for the GBP/USD pair.
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GBP/USD technical outlook
On the daily chart, we see that the GBPUSD pair has remained firmly above 1.2400. The price is between the 50% and 61% Fibonacci retracement level. It is also along the 28-day EMA and slightly below the 50-day EMA. Also, the price is slightly above the Ichimoku cloud. Therefore, there is a possibility that bulls will attempt to retest the previous high of 1.2660.
On the flip side, a move below 1.2254 will invalidate this trend. This price is slightly below the 50% Fibonacci level and below the Ichimoku cloud.