GBPUSD - Retreats from Resistance at 1.32 as PM May Tries Again with Brexit

As expected, it met some resistance from the 1.27 level several weeks ago as multiple attempts to push higher were thwarted and now that it has cleared, you could expect the pound to receive some support from this level should it be called upon.

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. 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 and it is starting to show signs of possible returning to somewhere near that level.

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 again is now playing a role.

Earlier this month the majority of the U.K. Parliament rejected the original Brexit deal, also known as the "Withdrawal Agreement."  However, this week Members of Parliament voted on seven amendments that had been tabled by lawmakers to change the course of Brexit.Now British Prime Minister Theresa May faces the difficult task of reopening Brexit talks with Brussels.  She is due to return to her European counterparts shortly to renegotiate a controversial part of the Brexit deal she struck with them.  However European Commission President Jean-Claude Juncker said earlier that the bloc’s Brexit divorce deal with London cannot be renegotiated.  “(May) was clear that this wasn’t going to be an easy process and that there would be reluctance on the EU side to reopen the Withdrawal Agreement,” a spokesman for the British PM said.  “The facts are very clear: the EU says it wants the UK to leave with a deal, we want to leave with a deal, the deal which we reached with the EU was rejected by parliament by 230 votes so therefore ... we are going to have to make changes to that deal in order to win parliamentary support.”