Technical Analysis – GBPUSD moving side-way along its channel

Following our last week’s report on GBPUSD, it failed to break below the psychological support at 1.2800 level. Instead, the price rebounded back to retest the support-turn-resistance from March near psychological level 1.3000, while forming a possible side-way channel between both levels. 

In terms of indicators, MACD currently showing a diminished bullish momentum yet fails to prove a possible formation of bearish momentum. With the lack of clear momentum from the MACD, a breakout from its’ current side-way channel will be required to obtain further confirmation. All in all, Exponential Moving Averages still showing upward potential.  

From the fundamental point of view, EU27 had approved the request of another 3-month extension to January 31, 2020, with an alternative of allowing the UK to leave earlier should the Parliament ratify the Withdrawal Bill Agreement (WBA). However, terms on the extensions are that any reopening of negotiations on the WBA is prohibited and will be ignored by the European Union.  

On UK’s side, the Parliament approved Johnson’s request for an early election on December 12, supported by the Labour Party as a scenario of no-deal Brexit was removed from the table. After delaying for more than three years since the announcement, Brexit is finally happening, and all is left on who would be the ruling party with the majority vote to ratify the legislation of WBA and deliver Brexit. Coming weeks ahead will probably be quiet as the market waits for the election results, and with no breaking news regarding Brexit, unlike the past few weeks. Fundamentals will now focus on the dollar’s market to gauge on GBP/USD movement. 

Lack of possible news regarding Brexit in the near term will put a pause on the previous major hype.