GBP/USD struggles to break 2-week old resistance-line amid UK political uncertainty

The GBP/USD pair seesaws near 1.2940 while heading into the London open on Tuesday. The pair recently recovered on overall US Dollar (USD) weakness and upbeat news report signaling Brexit progress. However, challenges to the UK PM Theresa May’s position are likely restricting the Cable’s upside around a descending trend-line since April 15.

Contrast to the Guardian’s news report portraying the progress of the cross-party Brexit discussion, Bloomberg came out with a story that raises questions on PM May’s future position.

While senior Tory leaders have already eased Mrs. May’s positional concerns till December, Bloomberg reports that the Chairman of the national convention told PM May on Monday that more than 10% of chairmen and women of local parties had signed a petition to call an emergency meeting to vote on her departure.

The Sun reports that 28 day’s prior notice to the Conservatives is a must for calling such an important issue forward and hence PM May has at least till June to counter such fears. By then, the

UK PM is trying hard not to have the EU elections in Britain and can easily avoid such problems.

Given the absence of the UK data highlights Brexit talks, the US pending home sales, consumer confidence, and Chicago purchasing managers’ index can direct near-term moves from the US side.

The pending home sales could rise +0.5% versus -1.0% earlier contraction whereas the manufacturing gauge might increase to 59.0 from 58.7. The CB consumer confidence grew 124.1 during the previous readout.

Technical Analysis

Sustained break of 1.2940 could trigger the quote’s upside towards 100-day and 200-day simple moving average (SMA) confluence near 1.2965/70, a break of which might further please buyers with 1.3000 and 1.3050 resistances.

On the downside, 1.2900 and 1.2860 could restrict the pair’s near-term declines ahead o dragging it to 1.2830 and 1.2770 supports.