FxWirePro: Rising trend line provides support to GBP/USD; is it enough?

Brexit to be or not?

• The pound has been treading water in a tight range since yesterday against the USD; (1.329-1.32)
• It has once again found support around 1.32 area today, which incidentally coincided with the support of the rising trend line, which has been in place since last week when GBP/USD exchange rate tested another key rising trend line.
• Volatility remains high in GBP-based all pairs as the members of the UK parliament continue to vote on several key amendments and Brexit agreements, almost every day.
• Last night pound remained subdued amid Brexit confusion as MPs rejected several key amendments but accepted to extend the Brexit deadline. EU and UK would soon be negotiating on the duration of the delay.

As a delay in Brexit couldn’t fuel a rally, despite weakness in USD, the current trend line support may not be enough to push the pound to the next level. While our outlook in GBP/USD remains bullish, we expect the exchange rate to retest the larger trend line, which has been in place since December last year.

Trade idea:

• If the current trend line fails to support GBP/USD, the pound may correct to as low as 1.305-1.3 area. We recommend buying around the trend line. On the upside, GBP/USD should face ceiling around 1.34
• The rate is currently at 1.326