GBP/USD reverses a knee-jerk fall to fresh YTD lows, spikes to mid-1.2500s
• News that UK leadership challenge has been triggered prompted some aggressive selling.
• Possible delay in Article 50 might prevent Brexit supporters to back the no-confidence vote.
The GBP/USD pair reversed a knee-jerk fall to fresh 20-m0nth lows and rallied around 75-pips to fresh session tops, around mid-1.2500s in the last hour.
The pair's sudden fall during the early European trading session followed the news that leadership contest against the UK PM Theresa May has been triggered as the needed threshold of 15% has been exceeded.
The pair dropped to an intraday low level of 1.2477 but quickly changed course as after the UK Justice Minister Gauke said that a delay in Article 50 would be needed if Theresa May loses the confidence vote.
With several ministers coming out to pledge their support for May, Gauke's comments were seen as preventing Brexit supporters from backing the no-confidence vote, reportedly to be held at 1800 to 2000 GMT today.
Even if May is forced out, Parliament will take control of Brexit and expectations of a softer exit turned out to be one of the key factors prompting some aggressive short-covering bounce.
Technical levels to watch
Today Last Price: 1.253
Today Daily change: 33 pips
Today Daily change %: 0.264%
Today Daily Open: 1.2497
Previous Daily SMA20: 1.2769
Previous Daily SMA50: 1.2913
Previous Daily SMA100: 1.2946
Previous Daily SMA200: 1.3275
Previous Daily High: 1.2639
Previous Daily Low: 1.2481
Previous Weekly High: 1.284
Previous Weekly Low: 1.2659
Previous Monthly High: 1.3176
Previous Monthly Low: 1.2723
Previous Daily Fibonacci 38.2%: 1.2542
Previous Daily Fibonacci 61.8%: 1.2579
Previous Daily Pivot Point S1: 1.2439
Previous Daily Pivot Point S2: 1.2381
Previous Daily Pivot Point S3: 1.2281
Previous Daily Pivot Point R1: 1.2598
Previous Daily Pivot Point R2: 1.2698
Previous Daily Pivot Point R3: 1.2756