GBP/USD analysis: checkmate for PM May?

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3189

Conservatives sign a no-confidence letter on PM Theresa May.
Positive UK data kept Pound afloat, with growth resilient to Brexit.

The GBP/USD pair changed course and trimmed the previous two week's losses this past one, settling at 1.3189 after reaching a high of 1.3229 on Friday. Backing Pound's rally on Friday were UK upbeat data, as Industrial and Manufacturing Production rose more than expected in September, almost doubling market's expectations monthly basis. The NIESR GDP estimate for the three months to October came in at 0.5%, from previous 0.4%, adding to the bullish case for the pair, moreover as the dollar weakened on local political jitters and a poor consumer confidence survey released on Friday, with the Michigan index down to 97.8 from previous 100.7. Pound's momentum, however, could suffer a huge setback at the opening, as weekend news indicate that UK PM May leadership is again being questioned, as forty members of the Conservative Party signed a no-confidence letter in her. With forty-eight conservatives signing the letter, May could be replaced by another member of her party. The pair recovered up to the 61.8% retracement of the post-BOE's announcement decline, but the daily chart maintains a neutral stance, as the pair settled below the mentioned Fibonacci resistance and a few pips above an anyway flat 20 SMA. In the same chart, technical indicators are stuck within neutral territory, with no momentum upward. Shorter term, and according to the 4 hours chart, the pair established above a bullish 20 SMA, while technical indicators hold within positive territory but losing upward strength, indicating easing buying interest. The 1.3220 region has proved strong in the past, with a recovery up to 1.3300 possible on an upward acceleration through the level.

Support levels: 1.3165 1.3130 1.3090

Resistance levels: 1.3220 1.3260 1.3300

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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