GBP/USD: Pressure builds around 1.3250, UK CPI, FOMC in spotlight
|- The US Dollar (USD) gains meet disturbing Brexit headlines to drag GBP/USD down.
- The UK CPI and the FOMC meeting will be the key while news concerning Brexit deadline extension request could direct intermediate moves.
The GBP/USD pair trades near the intra-day low of 1.3250 ahead of London open on Wednesday. The pair recently weakened as the US Dollar (USD) registered gains across the board ahead of the Fed meeting whereas Brexit headlines maintained pressure on the British Pound (GBP). Traders are also waiting for the February month inflation numbers from the UK.
Having witnessed rejection to propose the third Brexit deal in the UK parliament, the British PM Theresa May is finding it difficult to please domestic lawmakers. The latest reports from ITV mentioned that some of them are revolting over the delay in Brexit. News reports were also on round conveying that PM May will send a mail requesting an extension of Article 50 date from March 29 to the EU policymakers soon and the regional board is less likely to approve the same unless getting details of how the requested will be spent.
Investors remained cautious during early-day as they await key data/events from the UK and the US. Among them, British consumer price index (CPI) will be the first to be released at 09:30 GMT followed by the monetary policy meeting result from the US Federal Reserve at 18:00 GMT.
The UK CPI isn’t expected to deviate from 1.8% (YoY) during February but may register an improvement to +0.5% from -0.8% if observing monthly data.
The US Fed is likely not to alter the present monetary policy with 2.5% Fed rate. However, recent weakness in headline data might push the central bank towards cutting its quarterly economic projections. Additionally, the Federal Open Market Committee (FOMC) might trim their 2019 rate hike forecasts from 2 in the December to only one rate-lift for the year 2019.
It should be noted that the EU summit will also take place on Thursday and PM May might try to send a written request for the deadline extension today in order to avoid further delay.
GBP/USD Technical Analysis
A decisive break of 1.3250 support-line stretched since March 12 can drag prices to 1.3215 and then to 1.3190 rest-points whereas 1.3150 and 1.3110 can entertain sellers then after.
Given that the buyers take control, 1.3310 and 1.3360 may become their nearby favorites while 1.3385 and 1.3410 flashing on their radars afterward.
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