GBPUSD spiked higher yesterday after it was reported by Bloomberg that Germany and the UK have made progress regarding Brexit negotiations. What pattern has the recent move created?
6 September, OctaFX – The British pound has spiked sharply higher against the US dollar after reports surfaced that German officials have dropped key Brexit demands.
GBPUSD Spiked Higher on Potential Brexit Breakthrough
Germany and the UK have made progress regarding Brexit negotiations and it is potentially paving the way for Britain to strike a favourable deal with the EU.
This was a major shift from the previous hard-line stance between the UK and the EU. Last week, the leader of the EU said that he was strongly opposed to many parts of the Chequers plan. On Sunday, Theresa May responded in an opinion piece saying that she will not accept a deal unfavourable of her country.
GBPUSD Creates Bearish Pattern
The GBPUSD has fallen away from the best levels of Wednesday, with the move higher helping to close the price gap on the weekly open. The recent move higher has also created a bearish head and shoulders pattern on the four-hour time frame.
- The GBPUSD pair remains bearish while trading below the 1.2955 level, key support is now found at the 1.2863 and 1.2802 levels.
- If the GBPUSD pair moves above the 1.2955 level, buyers are likely to target the 1.2985 and 1.3040 resistance levels.
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