“¢ UK political headlines continue to influence sentiment surrounding the British Pound.
“¢ Speculations of a no-confidence vote on Tuesday might keep a lid on any strong up-move.
The GBP/USD pair quickly recovered around 30-40 pips from an early European session dip sub-1.2800 level and spiked to fresh session tops, around mid-1.2800s in the last minute.
After yesterday’s sudden collapse, triggered the latest UK political turmoil, the pair attempted a modest recovery on Friday but met with some aggressive supply, dragging the pair to an intraday low level of 1.2776 on news that the no-confidence motion against the UK PM Theresa May was underway.
Bearish traders, however, failed to regain dominant position and the pair quickly jumped back above the 1.2800 handle after the UK Environment Secretary Michael Gove extended support to the UK PM, saying that he has confidence in Theresa May and was looking forward to staying in the Cabinet.
Despite a good two-way price action, the pair struggled for a firm direction amid speculations that Brexiteers are preparing for a no-confidence vote in the PM on Tuesday as the threshold of 48 letters of the no-confidence vote in Theresa May might have been already reached.
With the UK political/Brexit headlines turning out to be an exclusive driver of the sentiment surrounding the British Pound, a subdued US Dollar price action did little to influence the pair’s momentum on the last trading day of the week amid absent relevant market moving economic releases.
Technical levels to watch
Mario Blascak, FXStreet’s own European Chief Analyst writes, “the golden cross of a 50-day moving average crossing over a 100-day moving average to the upside was formed on a daily chart indicating final trend reversal targeting 1.3060 before moving to 1.3380 and 1.3460 important Fibonacci level. Failure of Brexit deal to materialize should see GBP/USD fall towards 1.2660 first before testing 1.2100, the post Brexit referendum low before the upward correction started back in March 2017.”
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