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GBPUSD - Looking for Support at 1.27 Again as Brexit Future Unknown

    

 

GBPUSD - Looking for Support at 1.27 Again as Brexit Future Unknown
 
In the last month the GBPUSD has slowly but steadily climbed higher from a two year low below 1.25 up to the current key level of 1.27 and beyond. As expected it met some resistance from the 1.27 level in the last few weeks as multiple attempts to push higher were thwarted and now that it has cleared, it is now experiencing some support from this same level. In early December, the 1.27 level gave way to immense selling pressure, after the sterling was again enjoying much needed support from this level as it had firmly established as a key support level as the currency pair had enjoyed considerable support from this level on several occasions in the few months prior.

 

As has been stated several times in the last few weeks, should the GBPUSD drop through the support at this level, then it could fall considerably further with no obvious support levels nearby. Around mid-September the GBPUSD reached a two month high right at 1.33 however it has been a slow decline since then. Throughout July the GBPUSD was content to trade in a very small range right around the 1.31 level. It was also feeling some selling pressure from the resistance level at 1.32, which may play a role should the GBPUSD rally higher from its current levels.

Throughout May 2018 the GBPUSD dropped dramatically from the resistance level around 1.43 down to the 1.32 level. It has really struggled to recover from that significant fall and now may be paying more attention to the significance of the 1.20 level which provided strong support to the pound a couple of years ago.

British Prime Minister Theresa May has suffered a defeat to her Brexit plans, after British parliament demanded the government come up with an alternative plan if her Brexit deal is voted down.  So far PM May has refused to retreat from her unpopular deal, which envisages close trading ties with the European Union (EU) after leaving in March.  Set to culminate in a vote by MPs next Tuesday, British parliament has begun a five-day battle over Ms May’s Brexit plan.  Many believe that it is a vote she will lose which would likely deepen the uncertainty over the future of Brexit.  Possible outcomes include another referendum or a disorderly exit.  On Wednesday MPs voted 308-297 in favour of demanding the government come up with a Plan B within three working days after Tuesday’s vote.  Brexit minister Stephen Barclay told parliament it was the government’s intention to act quickly if it loses Tuesday’s vote. “I also want to reassure colleagues that whatever the outcome of this debate, we will respond rapidly, recognising that we must provide parliament with as much security as possible,” Mr Barclay said.

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