GBP/USD recovers from 4-month low despite UK’s political uncertainty
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GBP/USD recovers from 4-month low despite UK’s political uncertainty

  • Challenges to the PM May’s position weigh on the British Pound (GBP).
  • Lack of data could keep highlighting political news as a major catalyst.

Despite growing speculations over the UK PM May’s resignation, GBP/USD pulls itself back from the lowest since mid-January to 1.2665 during the initial Asian session on Thursday.

The Cable dropped yesterday even if the headline consumer price index (CPI) grew more than 1.9% prior to 2.1% on a yearly basis. The core CPI remained unchanged at 1.8% YoY.

The reason could be fresh threats to the British Prime Minister Theresa May’s position. Even if PM May tried pleasing UK lawmakers with her 10-point Brexit proposal, the leaders showed fury and demanded immediate resignation from her as the new document is almost same and emphasize on the second referendum.

While the leader of House of Commons, a Tory member Andrea Leadsom, resigned after the drama, concerns are mounting that Mrs. May will quit by Friday, as expected by the UK Times.

With the absence of major economics/data from the UK, investors may keep concentrating on political news for fresh impulse.

On the other hand, the US Dollar (USD) remained mostly strong as FOMC minutes refrained from conveying anything positive while risk-off remained in play.

Technical Analysis

Unless clearing January 15 low of 1.2670, chances of witnessing 1.2710 again on the chart are less likely. Also, February bottom around 1.2770 and 1.2800 could entertain buyers afterward.

On the contrary, 1.2600, 1.2480 and January month low near 1.2430 are expected numbers of the sellers’ radar during further south-run.

FX Street

FX Street

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