GBP/USD hunting to regain 1.42 after yesterday's tumble
|- Risk-off fails to drag the Sterling down for long, GBP makes healthy recovery despite market shocks.
- Little macro data on the docket has the GBP's Brexit fears balancing against broader market sentiment.
The GBP/USD pair is threading higher ahead of the European session, testing around the 1.4190 area and looking for more.
The Sterling declined heavily in Tuesday's decidedly risk-off market stance, but a floor was found from 1.4065 and the GBP has been lifting staunchly despite Greenback strength from the New York session's broad market sell-off.
Little data on the UK side greets Wednesday
The macro calendar is a thin affair for Wednesday's session except for US GDP figures at 12:30 GMT, which are expected to clock in at 2.7% versus the previous figure's 2.6%. Despite the poor showing for any UK-centric macro numbers, the Sterling is still being underpinned by some minor headlines providing just enough buoyancy for the Pound to stop itself from falling further down the risk hole.
Brexit still a concern, but fears are fading
The ongoing Brexit process has been a marathon of unknowns weighing down the GBP in 2018, but with the recent agreement between the European Union (EU) and the UK to develop a thorough Brexit strategy, concerns about the UK's exit from the EU are beginning fade. The latest from Brexit is a promise from the UK to Ireland, stating that they will find a solution to the 'hard-border' problem that has been a cause of growing concern for the Irish, in the face of the UK's Brexit potentially establishing a firmer border between the two countries, but the UK is assuring Ireland that a solution is being worked on and will be announced in that most auspicious of timeframes, "soon".
The Bank of England (BoE) posed a risk to the Sterling's bullish stance yesterday when they admitted they were mulling expanding some capital buffers for their internal banking system, and GBP traders recoiled temporarily at the thought, but the fear quickly faded after the BoE ultimately left their buffer rates unchanged, though they will be keeping a close eye on things.
GBP/USD Levels to consider
Yesterday's decline took a chunk out of the GBP/USD, but the pair is still in full-on ascending mode after beginning to climb in early March, and the pair is trading back up into last week's high points with little challenge. The next task for GBP bulls will be to clear resistance at this week's high at 1.4244, and from there the resistance to beat will be the 1.4300 major handle that the pair failed to climb back in January, while support rests at yesterday's low of 1.4065, with last week's low of 1.3915 waiting beyond.
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