GBP/USD under pressure over market's scrutiny over Brexit timeline progress
|- GBP/USD is currently trading at 1.3084, between a range of 1.3062 and 1.3191.
- GBP/USD is consolidated in the broader sense in a directionless Brexit deadlock.
- Ears are on the ground for Sino/US trade breakthrough while markets anticipate a solid Nonfarm Payrolls report.
GBP/USD had been supported at the start of this week with a soft-Brexit sentiment following a slight majority of UK lawmakers battling in the House of Commons to prevent a hard Brexit as PM May seeks further extensions to allow time for Parliament to come up with a cross-party agreement on behalf of the nation.
Brexit is up in the air
However, what was agreed in Parliament, by just one vote, may not be enough to save the UK from falling out of the EU by default on April 12th considering the fine timeline that PM May has in order to meet with EU members on 10th April and win their backing for an extension before 11th April where she will need MPs to agree to a new Brexit date, one proposed by the EU, and have it passed by The House of Lords before 12th April - All a little too tight in the market's opinion, which is currently weighing on sterling.
Sino/US trade talks going well
Elsewhere, investors focussed on U.S.-China trade talks. So far, we know that Trump is not going to do a deal unless it is a 'very good' one:
- China trade talks are going ‘very well’, moving a long very nicely;
- It must be a ‘great deal with China’, us will not make deal if it’s not a great deal;
- It’s a complex deal, which covers IP theft and technology.
We are not expecting any planned announcements unless Trumpsurprisess with a statement from the Oval office later today - so far, there have not been any dates set for Trump/Xi to meet.
Nonfarm Payrolls:
"While we think the bar to sway FX remains high and largely focused on developments abroad, confirmation that soft February payrolls, was a temporary aberration may help to fortify risk sentiment. To this end, this puts AUD and JPY in focus," analysts at TD Securities argued.
GBP/USD levels
"GBP/USD continues to rebound from the 200 day ma at 1.2977 – this has neutralised our immediate outlook," analysts at Commerzbank argued:
"The erosion of the 20 day ma suggests scope up to the 1.3351/82 resistance. Below the 200 day ma lies the 1.2929 55 week ma and the double Fibo retracement at 1.2900/1.2895, this is pretty solid support that is expected to hold the downside. This guards the recent low at 1.2772. The market recently reached 1.3382 before failing. Should the 55 week ma hold, our overall target remains the 1.3552 200 week ma."
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