The British pound started the week with strong gains

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The pound opened the week with gap up and grows up the second day in a row. The pair fixed above the 1.28 level, moving in the direction of the level of 1.29. However, the main merit in it belongs not sterling, but rather the dollar, which feels insecure in the Forex market. Discomfort the American currency is linked to the alarming signals from fed officials, who began to Express concern about the prospects for the world economy, which might affect the further actions of the regulator in the context of monetary policy tightening.
Meanwhile, the number of votes required for the vote of no confidence may, growing. According to one of conservatives is the vote likely will take place tomorrow. If so, the aggravation of the already unstable political situation in the country (after the recent series of resignations), and even in the midst of the “divorce process” with the EU definitely will not add the pound appeal. However, to speak of the overthrow may still early, and the preservation of its positions can lead to relief rallies in GBPUSD.
The risk that no transaction is saved. David Davis, who resigned as Minister for Bracito last week, said that the Prime Minister, the deal is even worse than the continuation of EU membership and expressed doubts that the Parliament will approve the draft of the transaction.
In any case, the uncertainty remains high, and hence the volatility of the pound will continue. To aggravate the fluctuations may decrease the trading volume in connection with the celebration of thanksgiving Day in the United States this week.
From a technical point of view GBPUSD is unlikely to be able to make a confident breakout of 1.29 in the near future, despite the retreat of the dollar bulls. Downside risks in the pair remain relevant.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS