Pound holding at resistance, can it test 1.25?
Technical Overview: Pound currently trading at 1.2675 which trading below the downward channel support 1.2700, currently trading below the psychological level 1.27 and below the key support 1.2680 which turned to resistance now. A break upside 1.2680 can check 1.2730/2750 further. Downside support lies at 1.2515 (Jan 03rd low). One can enter sell in every rise for downside said levels which could be a good strategy for the day until it stays above 1.2800 for upside said targets.
Fundamental: May stepped down as leader of the ruling Conservative Party on Friday, having failed three times to win parliament’s support for a European Union divorce deal that was supposed to steer the country smoothly out of the bloc and deal with Britain’s biggest political crisis in a generation.
GBP/USD drops through 1.2700 after much worse than expected UK economic data. April GDP -0.4% vs -0.1% forecast. April manufacturing output -3.9% vs -1.0% forecast. April construction output -0.4% vs +0.5% forecast. Boris Johnson remains the odds-on favourite to be Britain’s next PM. Nine other Tory MPs are vying to succeed May: first round of voting Thursday. Second to fourth rounds next week, before top two run-off. GBP could rise if Johnson fails to make run-off.
Suggestion: SELL GBPUSD TILL 1.2680 FOR 1.2590/2580 ELSE BUY ABOVE 1.2780 FOR 1.2850/2880
Important levels to watch:
S1: 1.2630 S2: 1.2600 S3: 1.2580
R1: 1.2660 R2:1.2680 R3: 1.2700