Tuesday, 24 January 2017

GBP/USD Bulls overwhelmed by the twist in Brexit drama

GBP/USD moved higher today, having posted daily high at 1.2545 which the low was marked at 1.2417. Currently the pair is trading at 1.2500 and is about to close at highest level for the 2017. 
The uplifted sentiment was triggered by the latest twist in Brexit drama. The UK’s Supreme Court ruled that the PM Theresa May will have to receive approval from the Parliament before starting the procedures of Article 50. Yet the situation is quite uncertain and this decision fuelled another set of significant economic and political surprises. What is of significant importance is that anyway this rule will cause delay in the already complicated process of leaving the EU.
In terms of technical levels, the GBP/USD is poised to extend the rally. The price is moving above the 20-day SMA, which is shaped in strong bullish turn. In the H4 chart the technical indicators are recovering from the extremely overbought levels. Bulls might be challenged to conquer new highs in case of fighting 1.2545 (today’s high) and then next target will become the resistance at 1.2670. Support levels are now located at 1.2415 and 1.2250 area (the current week’s lows).


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