Any relief will be short-term for the pound as long as May’s chances remain slim
Cable’s run higher overnight owed much to dollar weakness but regardless, sellers are waiting to pounce as long as Brexit uncertainty still looms large ahead of the meaningful vote in parliament on 11 December.
The upside move overnight ran into resistance from the 38.2 retracement level and the highs reached close to the 1.2850 handle. The highs today traded around a similar range but that all came crashing down in the last hour as price now falls back below the two key hourly moving averages as well.
That indicates that the near-term bias is now more bearish once again. Currently, price is leaning on to support from around 1.2777 but sellers look poised to keep the downside move going to retest the 15 November low @ 1.2724 again.
As long as May still isn’t the favourite heading into the parliament vote, expect the pound to stay offered in the event of any short-term relief rallies.