- Ongoing Brexit deadlock and likely future troubles for the UK PM May join dip beneath 200-day SMA to please the Bears.
- The absence of economic data/events pushes traders towards qualitative factors.
The GBP/USD pair is taking the rounds near 1.2940 while heading into the London open on Wednesday. The Cable slipped to the lowest in nine weeks on Tuesday as the return of the UK lawmakers from Easter recess flooded global markets with Brexit pessimism.
In addition to doubts over the future position of British PM Theresa May, less development at the cross-party talks to overcome Brexit deadlock also weighs on the British Pound (GBP).
On the other hand, welcome data points, the surge in equities and investor trust over the greenback during uncertain times fuelled the US Dollar (USD) versus the majority of its counterparts.
The Cable witnessed some profit-booking moves during the early Asian session on Wednesday amid Reuters report of increased hiring from the UK in short term. Though, the same can’t be termed as signaling the pair’s recovery as doubts over smooth British departure and a break of the 200-day simple moving average (SMA) favor the sellers.
Also to note, there are no major economic data/events scheduled for release during the rest of the day, which in-turn highlights qualitative catalysts for fresh impulse. Among them, the US equity moves, politics and Brexit are some headline words to observe.
Technical Analysis
Given the pair’s sustained trading beneath 1.2970/60 support-zone comprising 200-day and 100-day SMA, chances of its additional south-run to 1.2900, 1.2880 and 1.2830 can’t be denied. However, a successful break of 1.2970 can reprint 1.3000 and 1.3030 on the chart with six-week long descending trend-line at 1.3050 being follow-on resistance to follow.
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