The 1.2375/80 area is showing its hand again
As the quid reels from more Scottish and Brexit mischief we find that trusted levels are still in play.
Over the weekend we had news that the Scots would push for another referendum. That song hasn't changed. We also had some comments on the weekend political shows, one notably from Home Sec Amber Rudd saying that there was no possibility of the government agreeing to House of Lords amendments to the Brexit bill. That comment is likely to be weighing on the quid too, even though this is an expected part of the process. The bill will be batted backwards and forwards until common ground is found. Unfortunately, the market is not up on the finer machinations of UK politics so headlines like that can have traders reaching for the sell button first and asking questions second.
So to the pound and charts. The 1.2375/80 level is one that's played a role in support, and the odd time as resistance.
GBPUSD H1 chart
We've had a low of 1.2384 which out the support briefly to the test. That move looks like a typical stop trip with no real effort to push it further. The bounce has taken us up to old support turned resistance around 1.2435/40, which is the 200 H4 ma. A move above there will bring both the 55 & 100 H4's into play at 1.2464/77.
GBPUSD 15m chart
And thus we have the battle lines drawn for today. 1.2440 up, 1.2380 down, with 1.2400 the line in the middle. Given the buying that took us up from 1.2384, there's likely to be some intraday stops sitting just below there.
On a closing basis we should also keep an eye on both the 55 & 100 daily ma's which sit at 1.2400/06.
Update: Also from the weekend is an article from the FT saying that the EU will try and make equivalence rules tougher for the UK to use for access to financial market. Another reason to add to the soft pound mix. So much for Europe's value on freedoms eh ;-)
