GBP/USD approaches 1.1300 as PM Liz Truss resigns (20/10/2022)

  • GBP/USD approaches 1.1300 as PM Liz Truss resignsPolitical turmoil in the UK has kept investors on their toes ever since PM Liz Truss’s mini-budget failed miserably. The government’s collapse is complete as Prime Minister  Truss resigned and announced a leadership election. GBP/USD holds on to gains near 1.1300.From a technical perspective, the GBP/USD pair has managed to defend the 200-hour SMA, though the lack of any meaningful buying favours bearish traders. Sustained weakness and acceptance below the 1.1200 mark will reaffirm the negative bias, which, in turn, will set the stage for deeper losses. Spot prices might then accelerate the fall towards the next relevant support near the mid-1.1100s. The downward trajectory could further get extended towards the 1.1100 mark en route to the 1.1055-1.1050 support zone and the 1.1000 psychological mark.

    On the flip side, the daily swing high, around the 1.1240 area, now seems to act as an immediate resistance, which, if cleared, might trigger a short-covering bounce. Any subsequent move up, however, is likely to attract fresh sellers near the 1.1300 mark. This, in turn, should cap the upside near the 1.1335-1.1345 region. This is closely followed by the aforementioned trend-line resistance.

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