- Broader markets are Dollar-bearish, but the Sterling can’t pull itself upwards as Brexit concerns continue to weigh.
- Brexit ministers are resigning from their posts and PM May is set to face a challenge from political foes in the near future over her quickly-failing soft Brexit proposal.
The GBP/USD is hesitating near the 1.3300 major level As Monday’s Brexit revelations roil Sterling traders and force the GBP back down as the chasm between Prime Minister Theresa May and hard-line Brexiteers within the parliament continues to widen.
The UK’s Brexit minister David Davis resigned over the weekend, and Davis’ move spurred other hard-liners within the UK’s Brexit branch to resign as well, and PM May’s latest proposal for a soft Brexit is expected to face heavy challenges from Tory conservatives within the parliament. The Bank of England’s former Monetary Policy Committee (MPC) member Danny Blanchflower stated that the PM’s current tenure could be short-lived following David Davis’ resignation, and after months of threats of a leadership challenge, the Tories may finally make a move to oust the current Prime Minister.
Monday brings little to the field on the economic calendar for the GBP, with only a speech due at 07:50 GMT from the BoE’s MPC member Broadbent, who will be delivering the opening remarks at the BoE-hosted Economics and Psychology conference. Economic data for the UK continues to be a bull trap, and as the BBC’s latest survey noted, “While the modest pick-up in domestic activity points to a slight rebound in growth from a weak first quarter, there remains little evidence in the current data to suggest a sustained upturn in the UK’s economic growth prospects.”
GBP/USD levels to watch
The Sterling’s latest push has failed to generate a meaningful move above key barriers, and as FXStreet Chief Analyst Valeria Bednarik warned, “the pair has been unable to clearly advance beyond 1.3300 for the last three weeks, and bulls could feel encouraged on a break above the level, although the pair should sustain gains beyond 1.3450 to actually enter bullish territory. Readings in the daily chart favor additional gains, as the pair ended well above a mild bearish 20 SMA, while technical indicators head north within positive territory, at their highest since last April. In the 4 hours chart, a bullish 20 SMA keeps leading the way higher, attracting buyers on intraday pullbacks, while technical indicators also maintain their bullish slopes, but below this month highs. The 200 EMA in this last time frame comes at 1.3310, while a relevant high is located at 1.3314, making of the 1.3310 an immediate and strong resistance.”
Support levels: 1.3250 1.3210 1.3170
Resistance levels: 1.3315 1.3350 1.3390
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