GBP/USD pares all gains on the day to 1.2750 currently
Any gains in the pound remains limited at this point as Theresa May’s odds of winning the meaningful vote in parliament next Tuesday remains in limbo. The bout of uncertainty is contributing to the quickfire selling in the pound on any rallies over the past week and will continue in such fashion as long as the uncertainty fog isn’t lifted.
Cable made its way to a high of 1.2825 earlier as the dollar weakened but has now pared gains to be flat on the session at 1.2750 with price falling back below both key hourly moving averages again, indicating that the near-term bias is now more bearish.
Support is now seen around the region of 1.2724-35 but break below that and we’ll be looking towards the October low @ 1.2696 before the year’s low @ 1.2662 will be eyed by sellers.
May’s chances ahead of next week’s vote still aren’t great and it is the uncertainty of events that follow if she loses that is limiting any upside for the pound here. There will definitely be a second vote on the matter but the issue here will be if she loses by a hefty amount of votes, will she call it quits? Will there be a second referendum? Will there be a general election? Are we headed for a no-deal Brexit?
All of that kind of leaves a bitter taste in the mouth and that’s exactly what the pound is right now to currency traders as well.