GBPUSD Eyes Crucial Support Ahead of PM May Speech
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GBP Analysis and Talking Points:
- GBP Eyes PM May Address to 1922 Committee
- Technically, GBP Looks Vulnerable to Further Losses
GBP Eyes PM May Address to 1922 Committee
Theresa May will make an address to the 1922 Committee of backbenchers in parliament as the Prime Minister seeks relative calm over her Brexit plan. This has come amid growing tensions following the Theresa May’s failure to reach an agreement at the October summit, while reports have suggested that a no-confidence vote is on the horizon.
Interestingly, the PM’s spokesman noted that the PM had asked the committees chairman herself if she could address the meeting, which could in turn imply that the party organiser (Chief Whip) is confident of producing a choreographed show of loyalty. If indeed the PM looks to have achieved support, this could provide a lift for the GBP, however, failure to confidently answer a series of difficult questions may push the Pound to sub 1.2900 against the greenback.
GBP Vulnerable to Further Losses
GBPUSD is eying key support area at 1.2920-25 which mark the October lows. Given that negative momentum continues to build, GBPUSD may be soon approaching these levels. Bears will be looking for a close below 1.2900 to make a move towards the Sep 5 low at 1.2785. On the upside, resistance is situated at 1.3066 (23.6% Fibonacci retracement of the fall from 1.4377-1.2661).
GBPUSD PRICE CHART: Daily Time-Frame (Mar-Oct 2018)
Additional Brexit Analysis
- How does a leadership challenge to a UK Prime Minister work?
- Brexit Effect on Pound and UK Stocks: Impact of Deal or No Deal
- See our quarterly GBP forecast to learn what will drive prices through mid-year!
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
--- Written by Justin McQueen, Market Analyst
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