GBP/USD Price Analysis: Monday’s close pivotal to confirm a rising wedge breakdown
- GBP/USD remains heavy amid fresh Brexit concerns.
- Bears teasing rising wedge breakdown the daily chart.
- Monday’s close in focus, as RSI heads towards the bearish region.
GBP/USD hit fresh weekly lows near 1.3170, as the bears extend control amid intensifying no-deal Brexit concerns.
UK Prime Minister (PM) Boris Johnson announced October 15 as the deadline to reach a Brexit deal with the European Union (EU). Johnson said that if the deal is no struck by then, they will move on without a deal. The EU stands firm on its demands on fisheries, state aid and immigration.
Meanwhile, broad-based US dollar strength, underpinned by a fall in the US jobless rate and stronger wage growth, adds to the weight on the cable.
From a short-term technical perspective, the price has charted a potential rising wedge breakdown on the daily chart, with Monday’s close below the rising trendline support at 1.3232 pivotal to validate the pattern.
The confirmation could pave the way for a sharp sell-off, with the immediate cushion seen at the upward-pointing 50-daily Simple Moving Average (DMA) at 1.2930.
Acceptance below which could expose the horizontal 200-DMA at 1.2741.
Alternatively, a failure to close below the aforesaid critical support, the bulls could retest 1.3279, the confluence of Friday’s close and Monday’s high.
Further north, the 1.3300 figure could be put to test.
To conclude, the downside appears more compelling amid a bearish formation while the daily Relative Strength Index (RSI) points downwards, probing the midline.
GBP/USD: Daily chart
GBP/USD: Additional levels