GBP/USD: Rising From The Dead, Could We See 1.2880?
A 4% drop from peak to trough and only 3 green candles showing in the month of May for cable (GBPUSD) thus far. Politics, as usual, has dominated headlines with PM May handing her notice in and officially leaving June 7th.
Where does this leave GBP pairs? Considering the barrage that they have taken of late there is plenty of room to the upside in my opinion, but the political landscape must shift first. With Theresa leaving office it leaves the door wide open for a whole host of challenges that could take her spot, but we won’t go into that in this article, I don’t want any keyboard warriors to kill me with their political views. Dependant on who replaces May will have a big impact on the pound, a more robust character with a firmer stance may be able to push some sort of deal through or no deal I might add. With a split government like we have at the moment, it is very hard to push anything through let alone a Brexit deal.
Technically speaking, Cable has bounced off 1.26 with a very clean bullish candlestick reversal pattern as taught in our education. A break of 1.27 and a firm higher high formed will change the structure of the trend and we would anticipate further upside. Any rejection of this level and unfortunately it is more of the same, further downside and further political deadlock!