GBP/USD refreshes session tops, beyond mid-1.3100s but lacks follow-through
| • A sudden pickup in the USD demand prompts some intraday weakness.
• Brexit delay continues to lend some support and helped limit the downside.
• The focus will remain on the third meaningful vote, now expected next week.
The GBP/USD pair quickly reversed an early European session dip to an intraday low level of 1.3081 and rallied over 80-pips in the last hour, albeit retreated few pips thereafter.
A sudden pickup in the US Dollar demand, triggered by awful German/Euro-zone PMI-led sharp intraday slide in the shared currency, turned out to be one of the key factors behind the pair's sharp intraday slide on the last trading day of the week.
However, the fact that the EU leaders, at the March European Council meeting on Thursday, granted an extension to the Article 50 negotiating period until 12 April extended some support to the British Pound and helped limit deeper losses.
The pair showed remarkable resilience below the 1.3100 handle, rather attracted some aggressive bids and jumped beyond mid-1.3100s, though lacked any strong bullish conviction amid expectations that the UK PM May struggle to pass the relevant legislation.
Hence, the key focus will be on the third meaningful vote on May's withdrawal agreement, now expected to be held next week - likely on Tuesday or Wednesday, which might further collaborate towards capping any meaningful up-move, at least for now.
Technical levels to watch
Yohay Elam, FXStreet's own Analyst provides important technical levels to trade the major: “If GBP/USD were to fall, the next cushion is at 1.3063 which is the confluence of the BB 1h-Lower, the SMA 50-1d, and the Fibonacci 23.6% one-day. More substantial support awaits at 1.3003 where we see the Pivot Point one-day S1, the previous daily low, and the BB one-day converge.”
“Looking up, pound/dollar will face considerable resistance at the 1.3214 to 1.3227 region. We see a dense cluster including the BB 4h-Middle, the SMA 200-1h, the Fibonacci 23.6% one-month, the SMA 100-1h, the Fibonacci 38.2% one-week, the PP one-day R1, and the SMA 5-one-day. Further above, 1.3289 is an upside target with the Fibonacci 38.2% standing out,” he added further.
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