The pair reversed sharply on the 1.20 lows three weeks in the past, and for the previous ten days, it is buying and selling within a rising channel. The uptrend took GBP/USD nearly to 1.2600 (about 600 pips away from the 1.20 lows), nevertheless, it additionally reached overbought ranges as is proven by our superior overbought/oversold indicator on the chart.
Now, contemplating the significance of the resistance right here within the 1.2500 wider space, and the exhaustion of the uptrend, GBP/USD seems to be prone to embark on a correction decrease subsequent week.
GBP fundamentals/sentiment additionally are not that bullish.
If we additionally check out the basics, in addition, they help what the technicals are saying.
Primarily, there isn't any progress on Brexit. The scenario stays deadlocked, though GBP rallied in hopes of avoiding a no-deal Brexit after the British Parliament dominated out this feature by legislation. Nevertheless, as we all know, issues will not be that straightforward as a result of the British Parliament would not settle for the already provided exit deal both.
So, GBP has reached overbought ranges on a basic/sentiment foundation as nicely, as a result of something increased than 1.26 - 1.27 on GBP/USD implies that tangible progress on Brexit is achieved. However, that's not the case. Therefore, the pair is prone to revert decrease as no-deal Brexit dangers stay excessive.
It is potential commerce of tactical nature. So, issues can shortly change on impactful Brexit associated information which might nonetheless take GBP/USD considerably increased or decrease.