GBP/USD analysis: UK political turmoil undermines Pound
GBP/USD Current Price: 1.2989
- Weekend news suggest PM May will have to face another non-confidence vote.
- GBP/USD nearing March low at 1.2959, bulls to give up once below it.
The GBP/USD pair closed the week at its lowest for this April, a handful of pips below the 1.3000 figure, collapsing Thursday despite local data surprised to the upside. UK Retail Sales surged in March, by 1.1% MoM, much better than the -0.3% forecasted. Yearly basis, sales were up by 6.7% vs. the market's forecast of 4.6%. Even further, February readings were upwardly revised, yet dollar's demand and Brexit uncertainty kept speculative interest away from Sterling. Weekend news weren't encouraging, as UK news suggested that PM May could face a new non-confidence vote in the wake of the upcoming European elections, as the new Brexit Party lead by Nigel Farage gains overwhelming support ahead of them. There are no relevant macroeconomic releases scheduled in the UK for these upcoming days.
The pair is trading just below a daily ascendant trend line coming from March low at 1.2959, with Friday's attempt to correct higher limited by selling interest around 1.3010. In the daily chart, the Momentum indicator accelerated south after failing to overcome its mid-line, while the RSI consolidates around 41. Also, the pair is well below its moving averages, with the 20 SMA accelerating south, still above the 200 EMA, anyway adding to the bearish picture. In the 4 hours chart, technical readings also support a bearish continuation, as the 20 SMA accelerated south, currently at around 1.3020, while technical indicators are neutral-to-bearish, the Momentum around 99 and the RSI closer to oversold levels.
Support levels: 1.2960 1.2920 1.2875
Resistance levels: 1.3020 1.3060 1.3100
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.
