Cable holds just above 1.2900 as May continues to buy more time for a deal
The dollar recouped some of its losses earlier but was unable to hang on to them with price testing the 200-hour MA (blue line) before bouncing back up. There is some negative sentiment surrounding UK politics today as several Labour MPs are due to announce their resignation in the next half-hour or so over Brexit among other things.
That said, it's not likely to drive strong declines in the pound but it could present some fear that Brexit is continuing to form cracks in UK politics and that is something to be mindful about.
But just looking at price action in cable, buyers are still in near-term control but they are lacking much needed positive headlines to justify a break to the upside and build on the bullish momentum from Friday.
Currently, resistance from the swing region around 1.2925-30 is acting as a good cap to price gains; there's also the 200-bar MA on the H4 chart @ 1.2920. Offers are then seen closer to 1.2950 thereafter.
Despite the sentiment in the Labour party, things there are not likely to cause massive changes to the Brexit state of play. Theresa May is still buying more time to secure a last-minute Brexit deal and as such, the pound is left waiting on further developments in Westminster and Brussels before being able to find steady footing.
I still see the 1.3000 handle as being the mid-point in determining Brexit sentiment and I also still want to find a solid reason (technical or fundamental) to go long on the pound. As it stands, I would wait for more clues before rejoining the party here as fundamentally there isn't much reason to play either side now and technically, the near-term bullish bias isn't overwhelmingly strong either.
In any case, for near-term direction, look towards a further break above 1.2930 for buyers to extend gains. And for sellers, it's trying to find a break back below the 200-hour MA @ 1.2893 before targeting the 100-hour MA (red line) @ 1.2862.
