GBP/USD Forecast: Retains Its Neutral Stance Near This Year's High

GBP/USD Current Price: 1.3392

• Brexit continues to be the centre of attention for the pound.
• UK PM Boris Johnson meets EU von der Leyen in Brussels to unlock trade talks.
• GBP/USD without clear direction technically, diminishing odds for a move higher.

The GBP/USD pair ended in positive territory on Wednesday hovering around 1.3400 and far from the peak. The pound climbed to 1.3476, and again it was rejected from above 1.3450 and pulled back later, finding support above 1.3350. The Brexit drama still is the main driver in price action. During the American session, a stronger US dollar pushed the pair back under 1.3400.

UK PM Johnson is in Brussels in a meeting with European Commission’s President Ursula von der Leyen. The outcomes of the dinner could set the next days or years for the relationship between the UK and the EU. As negotiators’ reach a deadlock, both leaders will try to re-start negotiations looking for a deal before the end of the transition period by the end of December. The meeting could have a different ending that should lead to speeding up preparations for a no-deal Brexit and should trigger a sharp slide of the pound. If a deal looms, cable could approach again 1.3500.

GBP/USD Short-Term Technical Outlook

The GBP/USD pair is hovering around 1.3400, without a clear direction and even technical indicators are not showing strong signs. In the 4-hour chart, indicators are biased to the downside, only slightly. Price is standing at the 20-SMA in the mentioned chart. The key level on the downside is 1.3300: a consolidation below should lead to a sharper correction, to test December lows and then appears the critical 1.3080 area (100-day moving average and uptrend line). The main trend is bullish, and a firm breakout above 1.3450 would point to another test of 1.3500.

Support levels: 1.3340 1.3280 1.3220

Resistance levels: 1.3445 1.3505 1.3540

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