GBP price, Brexit news and analysis:
- GBP/USD is again testing resistance at a trendline joining recent lower highs.
- If it can break above a triangle pattern on the daily chart, further gains would likely follow.
- In the House of Lords, UK Prime Minister Boris Johnson has suffered another defeat on Brexit but it is expected to be reversed when the Brexit legislation returns to the Commons.
GBP/USD at critical level
GBP/USD is again testing resistance on the daily chart at a trendline joining recent lower highs. If it can break out to the upside from a triangle pattern, further gains are likely. However, failure there could lead to a test of support.
GBP/USD Price Chart, Daily Timeframe (October 7, 2019 – January 22, 2020)
Chart by IG (You can click on it for a larger image)
As the chart above shows, the pair continues to trade sideways, close to or just above the 1.30 level. However, a breakout to the upside is now plausible, with support from the lower bound of the triangle likely to limit losses if it fails.
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In the meantime, UK Prime Minister Boris Johnson’s Brexit legislation has again suffered a defeat in the House of Lords, this time on the issue of child refugees. It will likely be reversed, however, when the Brexit bill returns to the House of Commons and is therefore not expected to be a major factor for GBP near-term.
As for UK interest rates, the probability of a quarter-point cut to 0.5% on January 30 has slipped back modestly to just under 62%.
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— Written by Martin Essex, Analyst and Editor
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