The bear flag pattern could break moving into next week

GBP/USD has traded mixed on Friday despite a whole host of key drivers.
The price has converged into a bear flag type pattern.

GBP/USD 4-hour chart

GBP/USD has had a crazy week full of Brexit headlines. Ultimately this ninth round of talks didn’t seem to yield and significant results. The EU are now looking to proceed with legal action against the UK for breaching the terms of the withdrawal agreement. This was to be expected and if there is another deal then this could circumvent those issues. One of the biggest upcoming stumbling blocks is Boris Johnson’s self-proclaimed October 15th deadline. He once stated that if there is not a deal by that date then the two sides should walk away without a deal.

Looking at the chart, the price has moved into a flag formation. If the price breaks to the downside the main low on the chart could be tested again. Interestingly the price has been making higher highs and higher lows. A good sign for the bulls would be if the price breaks the green resistance line at 1.30.

The indicators are in the middle of their ranges. The Relative Strength Index is flatlining at 50. The MACD is also mid-range as both the signal line and histogram bars are looking flat. The signal lines are still above the mid-level though and that could be considered bullish.

Overall, the market is pretty sideways at moment. This looks set to continue into next week but if there is a move the levels mentioned above could be an important indication for directional bias.