Domestic politics look set to make this a possibly unpredictable and volatile week
If you're a pound trader, you very much would be used to the sort of volatility that has been brought upon by Brexit. While that still remains on the radar, now you also have to factor in the possibility that Theresa May could be in for a rough one in parliament this week.
The most recent issue is that there are calls for a no confidence motion to be tabled against May. This isn't anything new but over the weekend things have started to gain traction with conference calls among Cabinet members seemingly producing little to no consensus on a Brexit policy that can be agreed upon.
It's all making for a very nasty time as trading the pound this week will then rely heavily and almost solely on headlines. Calls of a no confidence motion will no doubt raise uncertainty and set the quid back a little but if there is a distinct possibility that Theresa May will be ousted, expect that to send the currency lower further still.
From a technical perspective, cable is still unable to break above the 100-day MA (red line) but remains supported by bids around 1.3000 since Thursday last week. With little to go on as we begin the week, I expect these tepid tones to continue until the next set of headlines hit to give fresh directional hints.
It's all about headlines now for the pound and by the end of the week, we could be staring at a reality that Theresa May will no longer be Britain's prime minister. My best advice is that if you're uncomfortable with headline risks driving prices - especially in a sensitive time like this - then stay on the sidelines and catch the next move.
It's always better to be late than to be wrong in trading.
