GBP/USD touches a low of 1.2912 on the day, lowest since 10 September
And price now looks to make a break below the 4 October low @ 1.2922. Hold a break below and it very much opens up a move towards the 1.2800 handle with support from the 5 September low @ 1.2786 also in sight.
As mentioned earlier, Theresa May’s address in parliament today could be accompanied by a leadership challenge and the potential domestic infighting is what is also weighing on the pound today – alongside a weaker euro.
Although May is unlikely to lose such a challenge, it’s still making for uncertain times and as traders, we hate uncertainty more than anything else.
Bids are seen at 1.2900 next so that may help limit the drop seen this session but a call for a vote of no-confidence will no doubt send a bit of a jolt to the pound to move lower on the headline reaction; if and when it comes that is.