GBPUSD BEARISH PRICE DIVERGENCE FORMING

The British pound has moved sharply higher against the US dollar after EU Chief Negotiator Michel Barnier stated that a Brexit deal could be made within six to eight weeks. The GBP/USD pair has moved towards the 1.3040 level, forming a bullish inverted head and shoulders pattern. Caution is still warranted as the recent move higher has created bearish MACD price divergence across the lower time frames.

• The GBPUSD pair is only bullish while trading above the 1.2985 level, key resistance is found at the 1.3040 and 1.3100 levels.

• If the GBPUSD pair moves below the 1.2985 level, price could correct back towards the 1.2955 and 1.2900 support levels.