Pound is still riding on leftover euphoria from Theresa May's victory overnight
Cable now runs into resistance from the 200-hour MA (blue line) and this will prove to be a key level for sellers to lean on in the near-term. Hold below and the bias still remains neutral but if price moves above it, then the near-term bias turns more bullish instead.
Despite the positive reflection from May's victory yesterday, we're pretty much back to square one on Brexit. In short, time just reversed back to Monday after the government opted to pull the Brexit deal vote in parliament.
May will be headed to Brussels later to seek concessions from European leaders on the backstop, but at this point it isn't clear that she will be able to get any. However, if there's anything that has changed following yesterday, is that you probably can't rule out May as she seeks to pursue her agenda from hereon.
As for cable, the 200-hour MA remains the key level for the time being that buyers need to break above to observe an extension back above 1.2700 towards the week's highs just above 1.2750 and last week's highs above 1.2800. Right now, the odds of May getting the concessions needed before the year end remains slim, and that's likely to keep any pound gains limited as we close out the year.
