DAILY NOTION - EUR/USD Price Chart Analysis

GBP/USD

Long position: 63.16%

Short position: 36.84%

GBP-crosses have experienced a wave of volatility in recent days around confounding Brexit headlines, and hopes of a last minute deal have bulls keeping the faith. The EU-UK leadership tandem agreed to keep negotiating until Sunday, December 13, at which point a “decision” will be made; color this strategist skeptical. Markets appear skeptical of a breakthrough as well, given the initial kneejerk reaction for weakness in the GBP-crosses. But given how GBP/USD rates have retained their bullish breakout potential, it would appear that rising risk appetite elsewhere. Thereby, sapping demand for safe havens like the US Dollar, is helping keep the pairs afloat.

GBP/USD rates poked through to fresh yearly highs last week, but haven’t been able to make any meaningful progress with the fate of the current Brexit deal. Resistance remains overhead two-fold: are facing resistance two-fold in the very short-term. First, the monthly and yearly high, which comes in around 1.3539 this week. Second, and far more significantly, the descending trendline from the November 2007 and July 2014 highs – which intersects through 1.3360/80 the rest of the week. Recall that the November 2007 high is the all-time high. Breaching 1.3539 and sustaining a breakout move higher would indicate a long-term bottom has formed in GBP/USD rates.

Bullish momentum has waned as the prospect of a ‘no deal, hard Brexit’ has increased. GBP/USD rates are linked among their daily 5-, 8-, 13-, and 21-EMA, which is still in bullish sequential order. Daily MACD is falling while above its signal line, while Slow Stochastics are quickly moving back towards their neutral line.