GBP/USD Technical Analysis: Better bid, eyes channel breakdown despite low odds of Brexit deal

GBP/USD is currently trading at 1.3184 - up 0.12 percent on the day - having found takers near 1.31 in the last few days, despite the low odds of a breakthrough Brexit deal. 

The European Union officials believe unrealistic expectations have built up in London, hence any concessions the EU would be prepared to give are unlikely to win a majority in the House of Commons.

Even so, Sterling is better bid and could rise well above 1.32, as the RSI on the hourly chart has diverged in favor of the bulls, validating the pair's strong defense of 1.31 in the previous two trading days. 

Cable's uptick could be associated with the speculation that the UK parliament will likely extend the divorce deadline and the pro-EU lawmakers will try to force the government to soften, or even reverse the divorce if May’s deal is rejected on Tuesday.

Hourly chart

• The previous hourly candle closed at 1.3184, confirming a falling channel breakout. The breakout has confirmed the bearish-to-bullish trend change first signaled by the higher lows on the RSI.

Trend: Bullish