Today for our analysis we would look at the GBP/USD currency pair. The GBP/USD is currently showing a similar behaviour as on Friday.
In general, we can definitely say that the British pound is still under pressure due to the United Kingdom’s Brexit negotiations with the European Union, as well as internal issues pertaining to inflation rates. This is why we can expect the pound to drop in value compared to other major currencies - perhaps not as sharply as it did right after the Brexit referendum results in 2016, but just as surely. Unless there is a major crisis in the United States that pulls the dollar down, then we would most likely see the USD make gains against the GBP.
What is important for the pair right now is that it is steadily moving closer to the nearby resistance level at 1.2930, which is also a notable point of bearish divergence for the price. This is why we can expect the GBP/USD rate to fail to overcome this level, and instead retract back down to the support level at 1.2844.
This movement is also confirmed by the Stochastic indicator which predicts we would see a reversal soon and the pair would turn bearish. This is why we recommend opening sell positions below 1.2930, placing the stop-loss and take-profit positions at 1.2974 and 1.2844, respectively.
