GBP/USD: 50-day SMA caps immediate upside as Brexit doubts hold the ground

PM May continues to struggle as the UK MPs seem united against her.
Opening of the British markets after an extended weekend could offer volatile sessions amid fresh political developments at the UK and the US.

Anil Panchal FXStreet

With the continuation of on and off plays concerning the Brexit, the GBP/USD pair remains under 50-day SMA level to 1.3100 at the initial trading hours on Tuesday.

The British Pound (GBP) declined despite Monday’s May Day holiday at the UK as doubts over PM May’s success in letting her Brexit deal through parliament remained present.

The UK Prime Minister Theresa May continues to struggle while trying to please opposition Labour party during cross-party Brexit talks.

Recent chatter in the market signal that PM May is a ready to compromise on the EU customs union to have the opposition support while she put forward her Brexit proposal in the parliament.

Though, as per the Telegraph news, some among the members of the British parliaments (MPs) have already shown readiness to turn the Brexit proposal down.

Hence, the Cable remains under pressure due to looming concerns over the future of the PM May, needless to mention about Brexit.

In the case of the US, the Trump administration is ready to levy fresh tariffs on China if both the leaders fail to seal the much-awaited deal by Friday.

Having witnessed the early-day response to the US-China trade deal developments and the Brexit news, traders may concentrate more on political news as there prevails no major data scheduled for release.

However, the UK Halifax house price index for April and JOLTS job openings (April) from the US could offer intermediate trade opportunities. While the UK housing market indicator may slow down to 2.3% from 2.6% on a 3m/YoY pattern, the US employment data may improve to 7.240 million versus 7.087 million prior.

Technical Analysis

50-day simple moving average (SMA) level near 1.3105 acts as immediate upside barrier, a break of which can trigger the pair’s recovery to 1.3130, 1.3180 and 1.3200.

On the downside, 1.3050 and 100-day SMA level of 1.2995 seem nearby important supports to watch.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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