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.