- Uncertainty surrounding PM May’s position and Brexit deal loom large.
- Lack of data/event could push traders to keep following political plays for fresh impulse.
The GBP/USD pair clings to 1.3070 ahead of the London open on Wednesday. The pair showed little reaction to the prevalent Brexit pessimism and doubts over the PM May’s future position.
On Tuesday, the cross-party Brexit talks failed to deliver an agreement over the Brexit deal that the UK Prime Minister Theresa May could present in the parliament for voting.
As a result, the UK now has to take part in the EU election. This weighed increasingly on the PM May’s reputation among Tories who have been trying to oust her off-late.
After the failed negotiations, The Sun reported that PM May gave until 04:00 PM (GMT) today to set out a road map for her resignation otherwise she will have to accept whatever plans are being determined by the Tories.
However, PM May responded actively to the ultimatum and presented plans to complete Brexit talks by September, which indirectly signals that Mrs. May will be in the office for at least four more months from now.
Elsewhere, the opposition Labour party members aren’t quite happy with PM May’s Brexit proposal despite her efforts to strike customs agreement with the EU.
The cross-party Brexit talks are to continue whereas EU election in the middle of the month could gain additional attention.
In the case of the US, political rift with Iran and trade tussle with China grab the spotlight.
At the data front, there prevails a lack of catalysts as neither the UK nor the US has any big releases/events to please momentum traders. Though, speech from Bank of England’s (BOE) Deputy Governor David Ramsden and from the Federal Reserve Governor Lael Brainard could be followed for intermediate moves.
Technical Analysis
A 50-day simple moving average (SMA) and an immediate descending trend-line could limit the quote’s nearby upsides around 1.3100 and 1.3115 ahead of fuelling it to latest high near 1.3180.
Meanwhile, 100-day SMA level of 1.3000 and 1.2960 mark comprising 200-day SMA may please sellers during the downside with 1.2930 and April bottoms near 1.2865 likely to get market attention then after.
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