GBP/USD: 1.3100 on the cards on signs of stability in UK Parliament? - FXStreet

Valeria Bednarik, chief analyst at FXStreet explained that the British Pound recovered sharply following news that Theresa May will become the next UK Prime Minister this week, after her last standing rival, Andrea Leadsom, quit the race after saying she does not have enough support for running a strong government.

Key Quotes:

"The GBP/USD pair was under strong selling pressure, hitting a daily low of 1.2849 after London's opening, but bounced over 150 pips with the news, extending up to 1.3017. Strong selling interest around the 1.3000 figure, however, contained the rally, with the pair ending the day a handful of pips below the critical mark.

The UK will have its Inflation Report Hearings this Tuesday, while a couple of hours later, the BOE will release its Quarterly Bulletin, both set to give a measure of the UK's situation, and therefore to anticipate the extension of the upcoming facilities, expected to be announced as soon as next Thursday, when the Central Bank will have its monthly economic policy meeting.

Technically, the pair presents a neutral stance in the 4 hours chart, with the price still hovering around a horizontal 20 SMA, and the technical indicators heading nowhere within neutral territory. Past week high for the pair was also set at 1.3017, suggesting some steady gains beyond it can see a continued recovery up to the 1.3100 region."