Cable is consolidating after the drop below 1.2200 on Friday
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- Reports that the UK Cabinet is revolting
Boris Johnson is coming under fresh scrutiny in the coronavirus crisis, after he backed his senior adviser, Dominic Cummings, after the latter is said to have broken lockdown restrictions. At least 18 Tory MPs have now publicly called for Cummings to resign.
This «double standards» ploy isn’t going down well with the public either, and is adding to the already poor impression given out by the government in handling the whole coronavirus crisis amid the issue with care homes and lack of confidence in easing restrictions.
The pound so far has remained relatively steady in all of this but the constant political bickering in recent times isn’t exactly a great sign to say the least.
Looking ahead, the pound still has to deal with the issue of Brexit in the coming month and a worsening impression on coronavirus handling will just add to the woes.
For now, cable is still consolidating around 1.2160-90 for the most part with buyers defending a drop beyond the 61.8 retracement level @ 1.2160.
Sellers remain in near-term control as price action continues to sit below the key hourly moving averages @ 1.2204-18. That remains the key region if buyers want to chase any upside potential later this week.
The sideways trading today may be a bit more to do with the UK observing a holiday (not helped by a US holiday too), but just be mindful of the levels above in relation to the headlines as well when liquidity starts returning tomorrow.