GBP/USD heading back towards 1.3300 amid UK political woes

  • Bears regain control as Brexit uncertainty prevails.
  • Focus shifts to Fedspeak and US inflation report for further impetus.

The GBP/USD pair stalled the Asian rally near 1.3360 and reversed nearly 30-pips in Europe, now heading back towards the 1.3300 demand zone, as markets digest the latest UK political headlines.

Reuters reported that the UK PM Theresa May appointed Dominic Raab as new Brexit Secretary. However, markets remain wary over the Brexit issue, as the fracture in the UK parliament continues to exist on PM May’s Brexit proposal.

On the USD-side of the story, the greenback once again attempts a tepid bounce from 3-1/2 week troughs reached against its main rivals, which in turn, also collaborates to the retreat in Cable from more than three-week highs.

Later today, the pair will continue to track the developments around the UK politics and USD dynamics ahead of the key US inflation report slated for release in the week ahead.

GBP/USD Technical Levels

According to Slobodan Drvenica at Windsor Brokers: “Bulls probe above top of rising weekly cloud (1.3330), eyeing next strong obstacles at 1.3404 (falling 55SMA) and 1.3410 (base of thick daily cloud), violation of which would expose key barrier at 1.3472 (07 June high). Broken daily Kijun-sen (1.3260) should keep the downside protected and guard pivotal support at 1.3200 (rising daily Tenkan-sen). Res: 1.3350; 1.3404; 1.3410; 1.3472. Sup: 1.3284; 1.3260; 1.3233; 1.3200.”

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