The Pound pushes slightly higher as investors continue to digest the uncertainty within the British government after Prime Minister Theresa May succeeded in retaining her governmental position following a no confidence vote. For now, the Pound is expected to continue ranging around the 1.2600 level until a significant development related to Brexit occurs. Investors need to keep in mind that a Brexit development might take place in the next two days given that an EU summit will be held. Some sources state that Theresa May will try to renegotiate the Brexit Withdrawal Agreement with the EU leaders. May will mainly focus on including a clause that will offer the UK a guarantee that the country will not be locked in the EU’s customs union forever in case a separate EU-UK trade agreement failed to materialize during the two year transition period.
The Pound continues to trade around the 13 and 50-period moving averages as a reflection of the indecision in the market. A confirmation of the break below the 13-period moving average and the 1.2590 support will pave the way for a drop towards 1.2500. Whereas, a rise above the 50-period moving average and the 1.2685 resistance will expose the 1.2760 resistance level.
Support: 1.2592 / 1.2500
Resistance: 1.2685 / 1.2760