GBP/USD is trading at around 1.3550, down from the highs seen on Thursday. The British pound is starting to consolidate around the best levels of the year against the US dollar, following the news that the final deadline for a Brexit deal is this Sunday.
GBP/USD has so far risen to 1.3625, close to the March 2009 low and the September 2017 high at 1.3655/58. Technical analysis shows that the GBP/USD pair could rally towards the 1.3800 critical barrier area if a Brexit deal is agreed. To the downside, a no-deal Brexit could see the GBP/USD move significantly lower, placing the 1.2700 level as a possible target.
Immediate upside pressure should be maintained while the cable remains above its current December low at 1.3135 and key resistance is found at the 1.3800 and 1.4000 levels. Only a drop below the 1.3135 low would push pound further south and target 1.2700 September low
Nevertheless, the incoming Brexit-related headlines will play a dominant role in influencing the sentiment surrounding the sterling and continue to infuse some volatility around the GBP cross.
