GBP/USD: Market turns indecisive near 1.30 amid Brexit uncertainty
- Monday's spinning top candle indicates the GBP/USD market has turned indecisive.
- A close below Monday's low of 1.2874 would imply a bearish reversal.
- The focus today is on the Brexit bill's second reading.
The GBP/USD market has turned indecisive near the crucial psychological resistance of 1.30 amid the lingering Brexit uncertainty.
The currency pair carved out a spinning top candle on Monday, which comprises of long wicks, representing two-way business
and a small body.
That candle is considered a sign of indecision in the marketplace. In this case, however, the candle has appeared following anear 90-degree rally from 1.22 and represents bullish exhaustion.
Hence, today's close is pivotal. A bearish reversal would be confirmed if the pair finds acceptance below Monday's low of
1.2874. On the other hand, a close above Monday's high of 1.3012 would imply a continuation of the recent rally.
Focus on the second reading of Brexit bill
The 115-page Brexit bill published by the UK government on Monday will get its second reading in the House of Commons on Tuesday.
MPs will debate and vote on the bill, which the government must win to proceed to the next stage of legislation. This vote is expected at 1800 GMT, according to Reuters News.
The government believes it has a majority to pass this stage even though the opposition Labour Party and other rival parties are expected to oppose it.
The government then has to layout the timetable for the remaining stages of the legislation, which needs approval from lawmakers.
If parliament does not agree to the timetable, Prime Minister Johnson's plans to leave on Oct. 31 could be derailed. That could yield a bearish daily close in GBP/USD.
Apart from Brexit-related news, the GBP/USD pair may also take cues from UK's Public Sector Net Borrowing (Sep) scheduled for release at 08:30 GMT and CBI Industrial Trends Survey – orders due for release at 10:00 GMT.
Technical levels