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GBPUSD analysis - British pound under downside pressure

GBPUSD analysis - British pound under downside pressure

23 July 2019, OctaFX – After weeks of political drama surrounding the UK’s next PM, the day is finally here when the British Conservatives will announce their next leader. The risk on the British Pound is heavily towards the downside, as Boris Johnson is largely expected to come out as the winner. Mr. Johnson pledged for leaving the EU by October 31 at all cost, even with a no-deal Brexit scenario.

Not only Finance Chief Phillip Hammond and Justice Secretary David Guake but key Tory policymaker Rory Stewart and Foreign Office Minister Sir Alan Duncan also announced their readiness to resign immediately after the result confirms Boris Johnson as the next UK PM.

In economic news, CBI Industrial Trends Orders for July will be released, but the main focus will undoubtedly be on the UK Leadership Announcement.

GBPUSD technical analysis

The Sterling broke below 1.25 yesterday as it’s getting ready for a possible more weakness depending on today’s fundamental catalyst. Currently, the Cable bears are testing the 1.2450 support level, a break below it will open doors for further weakness towards 1.24 and probably retest the yearly low 1.2370. On the other hand, the Sterling bulls need to break back above 1.25 to regain short-term control.

Support: 1.2450 / 1.24 / 1.2370
Resistance: 1.25 / 1.2560 / 1.26

Chart (H4)

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