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The GBPUSD pair on Friday saw two-way price action and closed on a dovish note. While improving risk appetite in the broad market helped the pair move sharply in the upside towards the mid-1.31 handle, it found resistance near 1.3130 handle. However, news that the third vote on PM May’s Brexit deal in UK parliament also ended against the government caused a fresh wave of weakness to ride the market. This resulted in the pair declining all the way from intra-day highs to intra-day lows of 1.2977 handle. The rejection of the third vote by UK lawmakers means that the UK has less than a month for preparing for Brexit unless they agree to participate in EU elections.
Headlines Eyed For Directional Cues
The US macro data saw a mixed outcome on Friday with PCE inflation data seeing a dovish outcome. This weighed down USD bulls giving British Pound an opportunity to rebound back above 1.30 handle as the trading session came to close for the day. As per conditions set forth by EU leaders, the UK now has until April 12, 2019, to prepare for Brexit but the time frame is too low to work on a new deal which suggests high likelihood for no-deal exit scenario. This has pressured Sterling in the global market preventing the currency from recovering above mid-1.3050 handle As of writing this article, GBPUSD pair is trading at 1.3020 up by 0.15% on the day.
Investors now await further updates on Brexit proceedings from the UK for directional cues, while focusing on macro data updates for short term profit opportunities. On the release front, both calendars have high impact macro data updates scheduled to release during late London market hours. The British calendar will see the release of Manufacturing PMI while US calendar will see the release of ISM Manufacturing PMI, Retail sales, Business inventories, and ISM Manufacturing employment data. Meanwhile escalating political tensions in the UK are also likely to provide some level of directional cues as lawmakers are set to meet again and make another attempt at inidicative vote. Expected support and resistance for the pair are at 1.3000, 1.2960, 1.2934 and 1.3051, 1.3079/80, 1.3135 respectively.
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This article was originally posted on FX Empire