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GBP / USD Current Price: 1.2737
- British Prime Minister has officially resigned as Conservative leader, paving the way for his succession.
- The United Kingdom will release Monday a series of macroeconomic data on economic health.
The pound sterling benefited from the weakness of the broad dollar this weekend, extending its weekly pace to 1.2753, its highest level in almost three weeks. The pair stabilized around 1.2735, as the UK's policy uncertainty kept sterling demand down. British Prime Minister May has officially resigned from his post as Conservative leader to pave the way for a leadership context that could ensure that a Brexiteer becomes the next British prime minister. Ms. May will remain as PM until her estate is resolved, probably towards the end of July. The news showed that Mr. Labours had beaten the Brexit Paty in a by-election in Peterborough. Both parties congratulated themselves on the outcome of the match, with the Brexit party having been formed only a few months ago by Nigel Farage. The Conservatives came in third, another sign of May's failure.
Next Monday, the UK will release industrial production, manufacturing output, trade balance and monthly GDP in April. Most of the numbers are expected to be lower than the March data, although better-than-expected figures could keep the pound afloat, at least until political noise returns.
The GBP / USD daily chart shows that it has settled just above a strongly bearish DMA and remains well below the largest, reflecting limited buyer interest. Technical indicators continued to recover as the Momentum now strives to exceed its median line and the RSI at 45, failing to confirm further gains ahead. In the 4-hour chart, the pair is moving above its 20 and 100 SMAs, with the shortest hovering above the largest, providing some support. The Momentum indicator, however, is heading south around its 100 level, with lower lows throughout the week diverging with price developments. The RSI indicator over this last period only weakens slightly in relation to overbought levels. All together indicate that buyers are not yet ready to continue pushing the pound higher.
Support levels: 1.2700 1.2665 1.2630
Resistance levels: 1.2755 1.2790 1.2830
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