GBP/USD: Recovery remains capped below 1.2000 on Downing Street drama

GBP/USD bears looking to kill bulls’ recovery attempts on Thursday.
UK PM Johnson is set to resign, political uncertainty heightens.
The US dollar index recaptures 107.00 despite positive equities.

Dhwani Mehta FXStreet

GBP/USD is preserving a major part of the intraday gains in the European session this Thursday, having found buyers once again near 1.1950.

Cable extended its recovery from 28-month lows of 1.1876 earlier in the day and almost tested the 1.2000 psychological mark before running into fresh offers. The pound was hit by news that UK Prime Minister Boris Johnson is set to announce his resignation. Johnson received another blow after Home Secretary Priti Patel joined the mutiny and demanded his resignation. Also, the newly appointed Finance Minister Nadhim Zahawi said that “PM Johnson Must Go.”

Also read: UK PM Johnson will reportedly announce his resignation

Uncertainty over who will be the next PM of the Kingdom heightened and weighed heavily on the sterling. Meanwhile, the US dollar index stalled its correction and found renewed demand amid looming recession fears and hawkish FOMC minutes, collaborating with the latest leg down in the major.

The UK political drama and broad dollar demand will likely keep the further upside elusive in GBP/USD. Investors look forward to the speeches from the Fed and BOE officials due later this Thursday. Cable, however, paid little heed to the latest BOE decision maker panel survey, which highlighted lofty inflation expectations, per Reuters.

Brexit concerns continue to dent the sentiment around GBP bulls, especially after European commissioner Maros Sefcovic told the European Parliament in Strasbourg, there is "no legal or political justification whatsoever" for Britain to change the Northern Ireland protocol that was part of its divorce agreement with the European Union (EU).

GBP/USD: Technical levels

GBP/USD

Overview
Today last price	1.1969
Today Daily Change	0.0041
Today Daily Change %	0.34
Today daily open	1.1928

Trends
Daily SMA20	1.2194
Daily SMA50	1.2362
Daily SMA100	1.2756
Daily SMA200	1.3131

Levels
Previous Daily High	1.199
Previous Daily Low	1.1876
Previous Weekly High	1.2332
Previous Weekly Low	1.1976
Previous Monthly High	1.2617
Previous Monthly Low	1.1934
Daily Fibonacci 38.2%	1.1919
Daily Fibonacci 61.8%	1.1946
Daily Pivot Point S1	1.1873
Daily Pivot Point S2	1.1818
Daily Pivot Point S3	1.176
Daily Pivot Point R1	1.1987
Daily Pivot Point R2	1.2045
Daily Pivot Point R3	1.21

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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