The British pound closed bearish on Monday. The declines came amid a quiet session with a lack of any fundamentals from the UK. As a result, the stronger USD pushed the sterling lower on the day. Furthermore, the initial optimism on the Brexit deal following comments from Chancellor Merkel also faded. Investors questions whether Merkel’s comments reflected the official stance of the EU.
GBP/USD to Correct Lower in Short Term
The currency pair turned bearish after it briefly rose to a three-week high. The current declines come amid a hidden bearish divergence on the daily chart time frame. The recently breached resistance area of 1.2170 is likely to be tested for support. If the support level holds, we expect to see the GBPUSD attempting to push higher once again. The upside target remains at 1.2511.
