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Thomson Reuters
Jul 09 - 02:36 PM
GBP/USD - COMMENT-Cable's Gains Fleeting Amid UK Political Angst
First appeared on eFXplus on Jul 09 - 10:20 AM

GBP/USD got a boost as the market takes PM May at her word that progress on a Brexit deal is on the way.
Thus, for the moment, if Cable can continue to consolidate above the 30-DMA, at 1.3272, there is potential for further gains.
However, there are significant headwinds on a number of fronts.
First, the resignations of David Davis nL8N1U40XR and Boris Johnson nS8N1PH02O highlight the continued division between PM May's soft-Brexit allies and those within the government who want a clean break with the EU.
Therefore, further resignations and increased political uncertainty remain risks.
Second, despite a tenuous deal among UK ministers, there are no guarantees that EU negotiators will accept the British proposal and a Brexit deal may not be in the cards by the March 2019 deadline.
Although cable had some positive momentum, owing to rising sentiment for an August BoE rate hike (BOEWATCH), bears are likely remain in control without a rise above the 1.3472 June 7 high and the 200-DMA by 1.3587.

Chart: Click here

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