GBP/USD to target 1.3500 if buyers manage to flip 1.3440 into support

GBP/USD trades in the positive territory above 1.3400 at the start of the week. In the view of FXStreet’s Eren Sengezer, the cable eyes technical rebound to 1.3500 while the EU and the UK are set to intensify Brexit talks.

GBP/USD looks to extend the technical correction

“There is still a considerable risk that the UK could opt out to trigger Article 16 in case sides fail to come to terms. The EU made it clear that they will retaliate in a proportionate way and even threatened to shelve the Brexit deal as a whole. That would be the nightmare scenario for the British pound. On the other hand, a positive outcome could open the door for a more decisive GBP/USD recovery.”

“n case buyers manage to lift the cable above 1.3440 and start using that level as support, the next target on the upside could be seen at 1.3500 (psychological level, 50-period SMA). Above that hurdle, strong static resistance seems to have formed at 1.3570.”

“Supports are located at 1.3400 (psychological level), 1.3360 (static level, 2021 lows) and 1.3300 (psychological level). The bearish pressure is likely to ramp up if investors start pricing the possibility of the UK triggering Article 16.”