DAILY NOTION - FXSTREET - GBP/USD Forecast - Nov 5, 2020
GBP/USD soared this Wednesday at 1.3140 but it is closing with a handful of pips below the 1.3000 mark. The early swings that saw the pair also falling to 1.2914 were dollar-lead, amid the lack of definition in the U.S. presidential election. As for U.K. data, Markit published the final version of the October Services PMI, which was downwardly revised to 51.4.
On Brexit, EU's chief negotiator Michel Barnier warned that “very serious divergences remain” in Brexit trade talks, although the U.K. and the EU will likely extend talks into next week. The news has negatively affected the pound.
What's Next?
The GBP/USD is neutral in the near term, as the 4-hour chart shows that it’s holding around a flat 100 SMA, while above an also directionless 20 SMA. Technical indicators in the mentioned time-frame have turned lower within positive levels, indicating limited buying interest. The bullish case could find some temporal support on the election-related news, but when it comes to the U.K. developments, the risk is skewed to the downside.
Support levels: 1.2950 1.1905 1.2855
Resistance levels: 1.3030 1.3085 1.3130
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