GBP/USD analysis: stable at 1.3100, but risk lean towards the downside

GBP/USD Current price: 1.3105

  • EU business concerned about no clear Brexit strategy.
  • Conservative Party moving one step closer to take PM May down.

The GBP/USD pair settled around the 1.3100 figures, down roughly 100 pips from Friday's close, as the Pound got hit by weekend news indicating that PM May could be replaced as head of the Conservative Party. Beyond pledging to get "the best deal possible" with the EU, May have been unable to present a clear Brexit strategy, despite repeated demand from local business and fellow policymakers to the point that forty conservative members signed a no-confidence letter on her this past weekend. Additionally, two of her ministers had to resign on different scandals this month, another sign of her leadership weakening faster than ever. This Monday, EU business leaders met with UK PM May, to discuss the future trade post-Brexit. Among others, the head of the German chambers of commerce said that the car industry alone would face annual tariffs of more than €2bn if no agreement is  reached, adding pressure over the UK leader. The pair bottomed at 1.3061, and recoveries have been rejected on approaches to the 38.2% retracement of the latest daily decline, at 1.3140. In the 4 hours chart, the 20 SMA holds flat a few pips below the mentioned Fibonacci level, reinforcing the resistance area. Technical indicators in the mentioned chart have managed to correct higher, but turned flat within neutral territory,  somehow suggesting that the risk remains towards the downside, as buying interest is limited.

Support levels: 1.3165 1.3130 1.3090 

Resistance levels: 1.3220 1.3260 1.3300

View Live Chart for the GBP/USD

 

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