GBP/USD trades around 100-day MA, Brexit angst may cap gains

Sterling’s love affair with the 100-day moving average continues for the third day.
Shadow Brexit secretary Sir Keir Starmer threatens to pull the plug on cross party Brexit talks.
Brexit angst will likely keep the pair on the defensive.

Omkar Godbole FXStreet Contributor

GBP/USD is trading around the 100-day moving average for the third straight day amid heightened Brexit uncertainty.

The currency pair created a candle with a long upper shadow on Friday even though the US labor department reported tame inflation reading for April, reinforcing market expectations that the Fed may have to cut rates in the next 12 months.

So far, however, the follow-through to Friday’s candle has been anything but bearish. The pair is currently trading just above the 100-day MA of 1.3006, having hit a low of 1,2997 in Asia.

The spot has been able to post marginal gains despite escalating US-China trade tensions and the resulting risk aversion.

The gains, however, could be erased in the European session, courtesy of Brexit uncertainty.

As per the latest report, talks between Labor and ministers over leaving the EU are set to continue today. However, shadow Brexit secretary Sir Keir Starmer has reportedly told Guardian that without a new referendum, up to 150 Labour MPs would vote against any deal.

Also, Starmer has threatened to end the cross party talks as soon as this week if the prime minister did not budge on her red lines, according to BBC.

Pivot points

1. R3 1.3093
2. R2 1.3071
3. R1 1.3035
PP 1.3013
1. S1 1.2978
2. S2 1.2956
3. S3 1.292

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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