GBP/USD analysis: Brexit saga far from over, next chapter on Monday

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2860

UK PM´s May survived the no-confidence vote by a tight margin.
The government now needs to come with an inexistent plan B on Monday.

The GBP/USD pair spent the day trading uneventfully around 1.2860, showing little reaction to the latest UK inflation data and to BOE's Governor Carney words, as speculative interest stayed sidelined ahead of the Parliament voting on PM's May political future. She survived by a very tight margin, as MPs voted 325 to 306 in favor of PM May, enough to keep the Brexit saga alive. The Government should come back to the Parliament Monday, with a still inexistent plan B. December inflation in the UK eased to 2.1% YoY, matching the market's forecast. The core figure, however, was better-than-expected, up to 1.9% from the previous 1.8%. BOE's Governor Carney spoke earlier on the day, reassuring that the UK banks can cope with a disorderly Brexit, adding that market's behavior suggests that prospects of a no-deal Brexit are now less likely.

The GBP/USD pair jumped some 30 pips with May's "victory" but quickly gave back the ground gained, heading into the session's close with modest intraday gains. The 4 hours chart offers a neutral-to-positive stance, as technical indicators head nowhere, right above their midlines, while the pair develops above a bullish 20 SMA, which acted as dynamic support all through the day. The 200 EMA grinds marginally higher at around 1.2750, drawing a line in the sand for bulls' conviction.

Support levels: 1.2830 1.2805 1.2765

Resistance levels: 1.2900 1.2930 1.2960

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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