The British Pound volatility was low with no news on the Brexit agreement. At the moment, there is a high uncertainty of further developments, but so far, the markets continue to optimistically assess the option with a long delay and the UK leaving the EU with an agreement. In the short term, the Pound remains under pressure before a vote in the British parliament.
There are more opponents of the agreement among the deputies of Great Britain than its supporters. Wilson, the representative of the Democratic Unionist Party, said yesterday that the Parliament was pleased that Brexit was approaching without a deal. According to Goldman Sachs, an exit without an agreement can take place with a probability of 15%. Analysts already give a 35% chance of canceling Brexit and 50% that a deal will be concluded.
GBP/USD Technical Analysis
The British Pound recovered recently and traded above the 1.3200 resistance against the US Dollar. However, the GBP/USD pair is facing a decent barrier near the 1.3250 level and it recently declined below the 1.3220 support.
The pair even broke the 1.3200 support level and settled below the 50 hourly simple moving average. Moreover, there was a break below the 76.4% Fib retracement level of the last wave from the 1.3160 low to 1.3261 high.
If the pair remains in a bearish zone, it could even break the last swing low at 1.3160. In the mentioned situation, the pair might test the 1.3135 level and the 1.236 Fib extension level of the last wave from the 1.3160 low to 1.3261 high.
On the upside, the pair must surpass a bearish trend line and the 1.3200 resistance on the hourly chart to move back into a positive zone.