GBP/USD is trading below 1.2200, ignoring PM Johnson’s optimism about renewing talks with the EU. Parliament is gearing up for a battle on Brexit next week.
Looking at the technical picture, the pair’s recovery from the vicinity of the key 1.20 psychological mark has been along a short-term ascending trend-channel formation. Given the recent slump, the mentioned channel seemed to constitute towards the formation of a bearish continuation – flag pattern – clearly suggesting that the near-term bearish pressure might still far from being over.
A convincing break through weekly lows support near the 1.2155 region – coinciding with 50% Fibo. level of the 1.2015-1.2310 up-move – will reinforce the negative outlook and accelerate the slide back towards challenging the 1.2100 round figure mark. A follow-through selling will further set the stage for the resumption of the prior/well-established bearish trend and turn the pair vulnerable to slide back towards the 1.2000 round figure mark.
On the flip side, momentum beyond the 1.2200 handle might now confront some fresh supply near the 1.2220-30 region, which if cleared decisively might assist the pair to aim back towards reclaiming the 1.2300 round figure mark. Sustained move beyond the mentioned hurdle might negate any near-term bearish bias and assist the pair to build on its recent recovery move further towards reclaiming the 1.2400 round figure mark.