GBP/USD: Recovery appears limited ahead of Queen’s Mansion speech

The GBP bulls remained in a wait-and-see mode in the Asian session this Wednesday, as dust settles over Carney’s rejection of rate hikes for the time being.

GBP/USD: Vulnerable amid political turmoil

The GBP/USD pair trades around a flat-line, extending its overnight side-trend, as markets turn cautious and refrain from placing any big positional bets on the pound amid lingering political concerns and dovish BOE Governor Carney’s remarks. BOE’s Carney: Now is not yet the time for rate adjustment

The spot remains on the back foot, following latest reports of the UK PM May’s Conservatives party’s failure to reach a deal with the Domestic Unionist Party (DUP). DUP says “It can’t be taken for granted”, May’s deal falters

Moreover, widespread risk-aversion amid oil weakness induced Asian markets tumble, also restricts any recovery attempts in the risk currency GBP. Looking ahead, the bearish pressure on cable is likely to extend ahead of the Queen’s Mansion House speech, as the UK PM Theresa May will go ahead without the support of the DUP.

Also, of note for the major remains the UK public sector net borrowings data and BOE MPC member Haldane’s speech due later in the European session.

GBP/USD levels to consider             

James Chen at Forex.com argues that, “after that initial breakdown, the currency pair rebounded but remained pressured under the major 1.2800 resistance level. On Tuesday after Carney’s speech, GBP/USD hit a low right around the key 1.2600 support handle, an original downside target. With any further breakdown below 1.2600, the next major downside target is around the 1.2350 support level.”