GBP/USD seesaws around 1.2850 as political plays at UK remain dominant

Labour's likely abstained from voting on Brexit deal could help the PM May’s proposal to pass the parliament.
Failure to please 1922 leader could renew the risk of an early exit by the UK’s PM May.

Anil Panchal FXStreet

With the UK’s politics remain in play, the GBP/USD pair is trading near 1.2850 at the initial Asian session on Thursday.

The British Pound (GBP) dropped to the lowest since mid-February against the US Dollar (USD) on yesterday after the news broke that the opposition Labour Party has refused to rule out abstaining in the vote of the second reading of the EU Withdrawal Bill if there is no deal with the government.

Speculations grew off-late that Labour’s absence from voting as a positive sign for the UK PM Theresa May’s Brexit plan that’s up for a vote during the week starting from June 03.

Meanwhile, nervousness still remains on the floor as the PM May is to meet the executive of the backbench 1922 Committee to draw a roadmap to her resignation.

It should also be noted that the UK’s economic calendar is mostly silent whereas US housing, jobless claims and manufacturing activity gauge could entertain short-term traders.

Technical Analysis

The quote now needs to regain its stand beyond April low of 1.2865 in order to aim for 1.2930 and 200-day simple moving average (SMA) level of 1.2960.

In a case where prices fail to recover, February month low near 1.2775 and 1.2700 could flash on bears’ radar to target.

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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