GBP/USD heads back towards 4-month lows amid growing UK political risks


  • UK PM May’s leadership risks continue to hurt the Sterling.
  • US-China trade and Brexit concerns to drive sentiment amid lack of fresh UK macro news.

GBP/USD broke its consolidative phase seen in early Asia and resumed its recent bearish momentum as growing concerns over the UK PM May’s resignation are back in play heading towards the European trading.

The Cable remained under pressure after the UK PM May’s new Brexit deal proposal was met with disappointment by her Party’s lawmakers, as the new 10-point document offered nothing new and emphasized on the second referendum. Further, the resignation by the House of Common Leader and a Tory member Andrea Leadsom accentuated the worries over the UK political climate as PM May looks to step down by Friday, as cited by the UK Times.

Adding to the downbeat tone around the higher-yielding GBP, the US-China trade escalation continues to dent the risk sentiment, as reflected by negative Asian equities and Treasury yields. The latest reports that the US has urged the South Korean companies to reject Huawei’s products further fuels the ongoing rift between the US and China.

Looking ahead the risks remain to the downside in the spot, as the UK political uncertainties and trade-related development will continue to keep the markets on the edge. Meanwhile, the US dollar is likely to remain broadly bid, in light of the recent FOMC minutes and ahead of the US Markit PMIs and new homes sales releases. Also, in focus will be a slew of speech by the Fed officials. It’s worth noting that the UK docket remains data empty this Thursday.

GBP/USD Technical Levels

GBP/USD

Overview
Today last price 1.2647
Today Daily Change -0.0013
Today Daily Change % -0.10
Today daily open 1.2661
 
Trends
Daily SMA20 1.2927
Daily SMA50 1.3032
Daily SMA100 1.3017
Daily SMA200 1.2957
Levels
Previous Daily High 1.2721
Previous Daily Low 1.2624
Previous Weekly High 1.3042
Previous Weekly Low 1.2711
Previous Monthly High 1.3196
Previous Monthly Low 1.2865
Daily Fibonacci 38.2% 1.2661
Daily Fibonacci 61.8% 1.2684
Daily Pivot Point S1 1.2616
Daily Pivot Point S2 1.2572
Daily Pivot Point S3 1.2519
Daily Pivot Point R1 1.2713
Daily Pivot Point R2 1.2766
Daily Pivot Point R3 1.281

 

 

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