GBP/USD Forecast: Target 1.3030 Checked, Next Target Is 1.2940-1.2920

• The GBP/USD slipped as low as 1.3011 on Friday as the combination of Brexit summit failure and UK retail sales slumping -0.8 percent m/m weighed on the currency pair.
• Although European officials still hope for Brexit deal, a no-deal scenario becomes a serious option.
• After the 1.3100 key support level was broken and the immediate target of 1.3030 reached, 1.2940-1.2920 0 is the next target area on the downside once 1.3000 psychological level is cleared.

The GBP/USD is trading little changed on the upside at around 1.3040 after falling past 1.3100 on Thursday with Brexit summit turning out to be a failure and the slump in UK retail sales. The biggest drag on GBP/USD though is the failure of the Brexit summit late on Wednesday to generate positive headlines.

“The atmosphere at the Brexit summit was very calm as officials acknowledge that no deal Brexit is becoming an increasingly likely scenario, although everyone involved wants the deal to be delivered,” the journalist attending the European Council meeting told FXStreet on Thursday.

The EU officials now increasingly hope for the Brexit transition period to be extended as the current roadmap is not providing both negotiating sides enough time to sort out the details. 

The EU chief Brexit negotiator Michel Barnier said on Friday that problem over Irish border could lead to failure of Brexit talks voicing no interest in hard Brexit.

Technically, the GBP/USD is moving within downward sloping trend with the technical oscillators in the neutral territory on the 1-hour chart and further potential on the downside. Once the GBP/USD broke the confluence resistance of 1.3095 representing a 100-day moving average and the 38.2% Fibonacci retracement of a move from 1.4377 to 1.2662 the currency fell as low as 1.3011 reaching the targeted level of 1.3030.  After brief respite above 1.3030, the GBP/USD is expected to re-test 1.3000 level that would open the way for o1.2940-1.2920 target representing October 2018 lows. 

GBP/USD 1-hour chart