GBP/USD struggles to extend latest recovery as Brexit party leads in UK’s EU election

Theresa May’s resignation couldn’t please the GBP buyers for long as disappointments from Brexit Party’s lead are on the rise.
Political news reports to gain major importance amid the UK holiday.

Anil Panchal FXStreet

With the early results of Britain’s EU election favoring Brexit party, the GBP/USD pair seems to fail to stretch recent recovery as it seesaws near 1.2720 during the early Asian session on Monday.

While news that the Brexit Party received the highest number of votes in Hillingdon triggered initial setback for the ruling Conservative party, that is already going through a lot of noise, BBC’s polls signaling Tories to get lesser acceptance added further pessimism for the British lawmakers.

The present Tory leader and UK Prime Minister, Theresa May, has recently announced her resignation for June 06. This initially helped the British Pound (GBP) off-late as political uncertainty surrounding Brexit got slight relief as many among the UK policymakers didn’t get well with the PM May.

However, the optimism is less likely to remain for long as not only search for the next PM, wherein Boris Johnson is a lead, is still to deliver results but the rising popularity of Brexit party increases the uncertainty.

Brexit party is a new one on the ground formed by former UKIP leader Nigel Farage. The party respects more distance from the EU and also supports no-deal Brexit, if needed.

It should also be noted that the UK markets are closed on Monday due to Spring Bank Holiday.

Technical Analysis

The three-week-long descending trend-line and February lows highlight 1.2770 as near-term important resistance for the pair, a break of which could propel prices to 1.2800.

Meanwhile, 1.2680 and 1.2600 are likely nearby supports for the pair with 1.2480 and January 2018 bottom around 1.2430 being expected targets for bears then after.

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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