GBP/USD attempts a break of the 200-hour moving average
The pound is holding steady on the session as it pushes higher against the euro and the dollar on the day. Cable in particular is touching a session high of 1.2852 and buyers are looking for a break above the 200-hour MA (blue line) to establish a near-term bullish bias in the pair.
Should buyers hold a break, it opens up a play towards resistance at the 50.0 retracement level @ 1.2877 as well as the 1.2900 handle. The pound is still trading heavily on Brexit sentiment and for the time being, headlines have gone rather quiet. The EU summit over the weekend produced a positive reaction as European leaders agreed to the draft deal without much of a hassle.
But focus now turns entirely to a meaningful vote in the UK parliament and May’s chances of winning that is still rather slim. Despite that, the pound continues to hold up rather well but expect the next two weeks to be dominated by parliament members expressing their support/disapproval for May’s Brexit deal.
Those headlines will likely swing the pound around more as we head closer towards the vote, reported to be in the week of 10 December as it stands today. For now though, the lack of fresh developments is helping to provide a calmer backdrop for the pound. However, I would argue it is tough for the quid to find a significant upside break with a key risk event still to come.
If anything, I would expect the pound to slowly dip in the weeks ahead as long as the current status quo remains i.e. May continues to face an uphill battle to gather enough votes for her Brexit deal to pass a meaningful vote.