The return of domestic political turmoil in the United Kingdom has led to a flurry of selling momentum for the British Pound, which fell over 300 pips during the previous trading week.
The selling momentum has returned once again in the early hours of Monday morning and the newsflow circulating around UK Prime Minister Theresa May needing to state her leaving date coupled with Labour Leader Jeremy Corbyn stating Brexit discussions have broken down makes it doubtful for buyers to be tempted back into the GBPUSD.
Taking a look at the technical picture, the GBPUSD remains firmly bearish on both the daily and weekly charts. There have been consistently lower lows and lower highs while the MACD has crossed to the downside. The solid weekly close below 1.2820 has opened the doors towards 1.2700 and 1.2620 in the near term.
EURGBP lifted by political drama
British Pound woes over UK Prime Minister Theresa May potential departure date to be announced plus the documented breakdown in Brexit negotiations with the Labour party has led to the EURGBP breaking above 0.8750. The pair has hit a three-month high at 0.8770 and further Pound negative positions will be seen as the impetus for prices to venture towards levels not seen since January 2019 above 0.8850.
Bulls are clearly in control on the daily charts with 0.8750 acting as significant support that could promote further upside. The weekly close above this point signals a move higher towards 0.8800 in the short to medium term.
GBPJPY bears greedily eye 140.00
Weakness in the Pound combined with the safe-haven status allure of the Yen in light of the escalation in US-China trade tensions has been a trader’s dream for selling the GBPJPY.
The GBPJPY has dropped 500 pips over the past two trading weeks, and more woes to come for the Pound suggest that there is further weakness in the pair yet. Focusing on the technical picture, the pair is heavily bearish on the daily charts. A solid daily close below 140.00 may open the flood gates with the first key levels of interest around 138.60 and 138.00, respectively.