We're in the midst of a big moment for the pound after PM May takes the Brexit gloves off
There's nothing like the smell of blood to start the week and it's the pound that's bleeding. May's news is a shock purely because of her single market comments. For the negotiations, it's a very very strong comment that tells Europe that we won't be threatened by them dangling the threat of losing access to the single market. It's political brinkmanship at it's finest, though whether it pays off is the big question. That's for the future but for now, the market sees it as a negative for the UK financial industry and as that's where all the big bucks are, a negative for the UK.
So here we are below 1.2900 and struggling to get back above. In prior posts I've said that the 1.2870/75 and August lows around 1.2865 are very important for the current range we've been in.
GBPUSD daily chart
We've dipped below both those lows but have been back above. Where we go now is going to be based on the next few hours. If we stay above 1.2875 then there's hope for a retrace. If we can't then we will be on for a test of the years lows, and possibly worse.
We're at a pivotal point for cable now and it's up to the market to show us what it wants to do next.
