GBPUSD has built up some momentum early Monday and contacted its most significant level in 10 days above 1.2300. The close term specialized viewpoint proposes the pair hopes to extend higher yet financial backers could cease from focusing on extra pound gains in the midst of political butterflies.
UK parliament individuals will decide on regulation that would permit clergymen to revise portions of the port-Brexit arrangement and eliminate keeps an eye on merchandise entering Northern Ireland from the remainder of the UK. At the point when regulation was proposed, the European Union voiced its resistance and said that it would abuse global regulation. As per BBC, British Prime Minister Boris Johnson said on Monday that he was expecting to turn that regulation, whenever supported, into regulation before the year’s over.
Nevertheless, risk flows remain in control of markets so far on the day with the UK’s FTSE 100 Index rising 0.7% on a daily basis. Additionally, US stock index futures are up between 0.4% and 0.75%. Brexit-related headlines, however, could cause the mood to sour and weigh on GBPUSD.
Later in the day, May Durable Goods Orders will be featured in the US economic docket. Market participants will pay close attention to the Pending Home Sales data as well, which is expected to show a 4% decline in May. A bigger-than-expected decrease in that data could cause investors to move away from risk-sensitive assets and help the dollar gather strength.
GBPUSD is facing next resistance at 1.2360, where the Fibonacci 61.8% retracement of the latest downtrend is located. In case the pair manages to clear that hurdle, it could target 1.2400 (200-period SMA on the four-hour chart) and 1.2460 (static level, former support).
On the flip side, 1.2280 (Fibonacci 50% retracement) aligns as first support before 1.2250 (50-period SMA) and 1.2200 (Fibonacci 38.2% retracement).
In the meantime, the Relative Strength Index (RSI) indicator is holding comfortably above 50, suggesting sellers remain on the sidelines for the time being.