GBPUSD Outlook: Sterling Stands at the Front Foot ahead of PM May’s Statement on Brexit to the Parliament

Technical analysis of Forex market

Cable holds near session high at 1.3181 in early hours of US trading and awaiting PM May’s statement to UK parliament on Brexit, scheduled at 14:30GMT. Sterling opened with gap-lower on Monday after Brexit talks over the weekend stalled, as negotiations got stuck over the border of Northern Ireland, but regained traction and advanced on weaker dollar. Rally covered overnight’s gap, reducing downside risk, however, could take a hit if May’s statement to PM’s raises fears of negative scenario – no-deal Brexit. May faces strong pressure after talks stalled, with growing opposition to her plan, making her task to finalize negotiations and satisfy all sides, very difficult. Hopes of reaching a deal on EU summit later this week are still alive, with positive tone from May statement today expected to further inflate sterling. Conversely, today’s recovery could melt easily if traders feel threats from May’s speech, with retest of daily low (1.3083) and sub-1.30 acceleration, seen as likely scenario.

Res: 1.3181; 1.3217; 1.3257; 1.3297
Sup: 1.3111; 1.3083; 1.3075; 1.3050