The British Pound pares the decline from earlier this morning as the U.K. House of Commons voted 324 to 298 to reject an amendment to the Brexit bill, which would have given Parliament unprecedented powers over the premier’s Brexit strategy. However, recent price action continued to extend losses in GBP/USD.
U.K. Premier Minister Theresa May averted a revolt by pro-European lawmakers in her party, avoiding what threatened to be a major political crisis. Now the focus turns to the price of the rebel’s compliance and another fight looms.
At the same time, updates to the U.K. CPI will be headlined and core reading for inflation holding steady in May, and signs of sticky price growth may encourage the Bank of England (BoE) to further normalize monetary policy in 2018.
From a daily chart, near-term outlook for GBP/USD remains titled to the downside as the descending 20-day moving average will likely push the pair lower and the Relative Strength Index (RSI) extends the bearish formation from earlier this year.
However, mid- and long-term outlook seem not staying much negative. A failure to close below 1.3328 (50.0% retracement) raises the chance of rebound, and potential rally is supported by a signal where last few candlesticks showed long lower shadows, which may suggest a strong support level below.
Chart 1: GBPUSD Daily
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