GBP / USD reversal from 1.3025 extends to 1.2960 zone

• GBP / USD rally from 1.2880 has been capped at 1.3025.
• The pound moves back and forth with the news of Brexit.
• UOB currency analysts note significant resistance at 1.3050.

The rebound of the British pound from Friday’s lows at 1.2880 has been capped at 1.3025 and the pair has lost momentum during Monday’s US session, returning to the mid-range of 1.2900.

Pound rejected from the zone since 1.3000

The pound has been trading back and forth on Monday, amid conflicting reports on Brexit negotiations with the EU. GBP / USD appreciated during the early days of the London session, and investors are confident that the UK and the EU will strike a last minute deal to avoid a ‘hard Brexit’, as the UK stated during the weekend week that the doors are still open for a Brexit. agreement.

British negotiator Michel Frost, however, claimed on Monday that there is no point in resuming talks, while Michael Gove, a senior UK minister, said the UK is ready for an “Australian-style” exit from the Union. These comments have clouded investors’ hopes for a last minute deal, undermining the positive tone on GBP crosses and pushing GBP / USD back below 1.3000.

GBP / USD faces major resistance at 1.3050 – UOB

On a technical level, the UOB currency analysis team points to the 1.3050 resistance area: “Yesterday (Oct 15, spot 1.3015) we indicated that ‘rapid changes have resulted in a mixed outlook’ and GBP ‘ it could trade between 1.2845 and 1.3120 over a period of time. Subsequently, the British pound gave up most of its gains since Wednesday (October 14), as it fell to 1.2891 before closing on a weak note at 1.2899 (-0.85%). While the underlying tone has weakened, it is too early to expect a sustained decline below 1.2845. Overall, the GBP is likely to trade in a slightly defensive mode with 1.3050 acting as a strong resistance. ”