GBP/USD analysis: May softer-Brexit´s stance triggers batch of resignations

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3257

UK David Davis and Boris Johnson resigned on May's softer Brexit approach.
PM May avoids a no-confidence vote, Pound bounces from daily lows.

The Pound was in the eye of the hurricane this Monday, soaring to 1.3362 against the dollar on weekend news over a Cabinet agreement on a softer Brexit, but plummeting after UK Brexit Minister, Boris Johnson resigned. The GBP/USD pair plunged to 1.3189, to find some stability later around 1.3200, as the UK Cabinet falls apart, as Johnson's resignation came after David Davis´s one, amid both opposing to the softer-Brexit plan proposed by PM May last Friday. Dominic Raab replaced David Davis as Brexit secretary. Meanwhile, PM May said that EU offers for future relationships are unacceptable, and that poses a serious risk of disorderly no-deal Brexit. Rumors made the rounds, about a possible no-confidence vote against PM May, who already survived a couple of similar crisis, although UK Conservative Party Chairman Brandon Lewis said that he did not expect a confidence vote against Prime Minister May, helping the pair recover more ground. Technically, the 4 hours chart shows that the pair is currently battling around a still bullish 20 SMA, while technical indicators have stalled their declines around their mid-lines, suggesting that the market likes the softer-Brexit option, as long as May's head doesn't roll, and that they are not yet willing to unwind Pound longs.

Support levels: 13120 1.3190 1.3155

Resistance levels: 1.3285 1.3320 1.3365

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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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