GBP/USD - Test at 1.2680-1.2700 most likely scenario, during the week

GBP again under pressure, even in the first minutes of trade for the week. Last week, the EU's chief negotiator, Michel Barnier, hinted at a good deal, but back on the weekend, he returned to the heavy conversation about the deal.

Barnier commented that he was "firmly against" the proposals for a commercial deal by Theresa May. He warned that there would be significantly less British cars in European car showrooms.

Barney's comments have contributed to a very negative start at GBP/USD.

Technically the pair remains in a descending channel, with the current Price Action giving good prospects for adding to the short positions. The first minutes of trade remain in favor of the USD, and it seems that filling the gaff in the first hour will be difficult. However, an entry with short of current levels is risky. If the gaff is not filled in the first hour, it's good to focus on the first resistance area, which is at the level of 1.2934. SL is good to put above the main trend line and 50% Fibonacci correction of the main trend - 1.30868 Given the time ahead and the poor development of the negotiations, I expect the GBP to remain under pressure throughout the week and a test on the previous bottom around 1.2700 remains the best, the probable scenario.

Alternative Scenario: If the price goes above the resistance zone and stays there, the negative scenario will break and we are more likely to see a raise.

Read more:

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• GBPUSD short term sentiment in front of important data at 11:30 (GMT+3)
• A price below 2.268 can lead to a new decline by the pound
• Pound rises after the defeat of May’s Brexit deal