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Cable Storms Toward 1.2354 Amidst Resignation of UK PM’s Brother

Brexit-related headlines are coming out fast and steady this Thursday, with the newswires abuzz of the sudden resignation of the UK PM’s brother Jo from his government and parliamentary position. Jo Johnson left his posts Thursday after hinting that the UK PM’s actions were not in the national interest.

In the meantime, the UK Prime Minister Boris Johnson’s spokesman was picked up in the last few minutes by the newswires as saying that constructive Brexit talks were held yesterday between the UK and EU negotiating parties and that both parties had agreed to continue to these talks on Friday.

“The PM still believes we need to have an election before the EU council on October 17…the PM believes the current position of House of Commons on an election is not sustainable,” the spokesman was quoted as saying.

In the meantime, the British Pound continues to build on the surge that began yesterday, as it continued to gain strength against other currency majors. As at the time of writing, the Cable had hit the 1.2356 mark after gaining 0.65% on the day, taking its rally from Tuesday’s lows to more than 400 pips.

Technical Play for GBPUSD

The cable has effectively scaled the descending trendline resistance that connected the highs of March 2019 up until yesterday. Having closed decisively with more than the 3% penetration close required for breakout confirmation, the GBPUSD is coasting towards the next resistance level that should be seen at 1.2377 (July 17 low). This is also the site of the R2 daily pivot, with the R1 pivot at 1.2309 already broken decisively.

Near-term, a little profit taking is to be expected, but this should give way to renewed strength at least until the NY session when the ADP Employment Change data hits the markets.

Further price action in the medium-term should come from more Brexit headlines and the US Non-farm Payrolls report tomorrow.