GBP/USD touches a low of 1.2901 on the day
It’s been a continued march lower for cable since breaking below the 100-hour MA (red line) last week as buyers failed to maintain the near-term bullish bias as Brexit headlines continue to give sellers a reason to come back into picture.
The latest being that Theresa May could be looking to cancel today’s Cabinet meeting as she still is unable to come up with a workable proposal that will be able to satisfy parliament members as well as European officials. The main issue is still the backstop and unless either party does her some favours and offer concessions, this deadlock looks nigh unsolvable at this stage.
As mentioned last week, the more this drags on and hopes of a November summit fade, expect the pound to continue to be weighed lower as traders start fearing that the one-off chance in December may not be enough to seal a Brexit deal.
If a November summit gets pushed back as May continues her struggles with parliament, this is going to be a really tough week for the pound to find any lift in my view. A move towards the year’s low @ 1.2662 certainly looks on the cards now.