GBP/USD rises to a high of 1.2919 on the day

Theresa May survived a tricky meeting overnight when she addressed lawmakers from her own Conservative party and there weren't any imminent signs of a leadership challenge or threats of that following the meeting. That has so far been enough for pound sellers to take a bit of a breather but the move higher in the pound - although owes a bit to dollar weakness as well - is also a wee bit of a technical one.

Looking at GBP/USD, price tested the lower end of the downwards channel overnight before settling just around the 1.2900 level. And that helped provide some support for the price action seen so far today. But despite the move back above 1.2900, there is no reason to suggest that sentiment has turned around for the pair.

The pound will still remain tepid as Brexit negotiations continue to encounter a deadlock and Tory lawmakers are likely just waiting for the right opportune moment - when they can sort out a viable candidate - to evoke a no-confidence motion against Theresa May. That signals that the fundamental headwinds have yet to clear for the pound.

And technically, price still sits in the downwards channel and below the 100 and 200-hour moving averages. That says that price bias in the near-term still favours bears at this point. It would take a break back above 1.3000 for buyers to feel safe once again about making a move higher in cable, and they would need help from fundamentals as well to do that - which doesn't look to be coming just yet.