GBP/USD analysis: May could save her spot, but Brexit is nowhere near solved
|GBP/USD Current price: 1.2624
- UK May could continue as PM after multiple MPs voiced their support ahead of the key vote.
- Brexit deal still not approved by Parliament nor the EU wants to review it.
The GBP/USD pair recovered from a fresh yearly low of 1.2476 to settle in the 1.2640 price zone by the end of the US session. The Sterling got hammered on the confirmation that UK PM Theresa May had to face a no-confidence vote from Tory MPs. Mrs. May said that she would contest the vote with everything she has, warning that changing the PM at this stage would mean delaying or even canceling Brexit. The recovery came as the result of multiple MPs voicing their support to May ahead of the vote, conducted through a secret ballot. Mrs. May could have saved her job, but she in no closer to fulfill Brexit promises, neither of passing the Brexit deal through the Parliament. Meanwhile, the EU is stubbornly firm on its stance against any additional negotiation. PM May announced she won't stand in the next election as party leader, a way of compensating the fellow party members that run against her.
The recovery may continue until market players realize Brexit is a checkmate for the UK. Technically, the pair is trading below its daily high of 1.2671, also below a strong static resistance at 1.2660, the former yearly low that rejected sellers a couple of times in the last few weeks. In the 4 hours chart, the price is currently holding above a still bearish 20 SMA, with the 200 EMA gaining downward traction at around 1.2810. Technical indicators recovered from oversold readings but remain within negative ground, losing upward strength. There's a long way ahead before calling the pair bullish, as the pair would need to firm up above 1.2840, something quite unlikely without a clear Brexit path.
Support levels: 1.2600 1.2555 1.2510
Resistance levels: 1.2665 1.2700 1.2745
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