The British pound is testing towards the 1.2800 resistance level against the US dollar after finding strong technical support from the 1.2722 level.
November 16, OctaFX – Yesterday, sterling dropped sharply after Brexit Minister Dominic Raab resigned. This was the biggest drop since the day the UK voted to leave the EU.
In the Asian session, sterling was little moved as traders waited for an indication of what will happen today. The chance of a no-Brexit deal is still a possibility as traders expect parliament to vote down the proposal by Theresa May’s government.
GBPUSD Technical Outlook
After yesterday’s plunge, the GBPUSD took a break in the Asian session as traders waited for more news on Brexit. The pair is trading at 1.2790, which is slightly above yesterday’s low of 1.2722. It is also above the low of 1.2630, which is an important support level.
The RSI has moved from yesterday’s low of 28 to the current 42. If the pair resumes the decline, traders should watch out for this support. This is because further declines will likely take the pair to 1.2500.
There is also a possibility that the pair will reverse when it reaches this level.
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