After an intraday dip to the session low level of 1.2831, the GBP/USD pair regained some positive traction and climbed back above the 1.2900 handle on the first trading day of a new week. The uptick came after the UK PM Theresa May delivered her statement on Brexit “Plan B”. Despite the lack of any significant details, May's speech further decreased the likelihood of a no-deal Brexit or a second referendum and provided a modest lift to the British Pound.
The uptick, however, remained capped amid some haven-driven US Dollar buying interest after the International Monetary Fund (IMF) lowered its global growth forecast for 2019 to the weakest in three years. This against the backdrop of the latest Chinese macro data, showing that the economy recorded its weakest annual growth since 1990, prompted investors to move into traditional safe-haven currencies and kept a lid on any further up-move.
The greenback held steady near two-week tops and prompted some fresh selling during the Asian session on Tuesday. Market participants now look forward to the UK labor market report, due at 0930 GMT. The ILO unemployment rate during the 3 months to November is seen holding steady at 4.1%, and wage growth is also seen matching that of the previous month. A stronger UK wages data might provide some fresh boost to the British Pound but any immediate reaction is more likely to be short-lived amid persistent Brexit uncertainties.
From a technical perspective, nothing seems to have changed much except that the overnight rebound reinforced strong immediate support near the 1.2830 region. Hence, it would be prudent to wait for a convincing break through the mentioned support before traders start positioning for any further near-term depreciating move. A follow-through selling might now turn the pair vulnerable to break below the 1.2800 handle and head back towards challenging the 1.2750-45 intermediate support en-route the 1.2700 round figure mark.
On the flip side, the 1.2920-30 region remains an immediate strong hurdle to clear, above which the pair is likely to make a fresh attempt towards challenging a key hurdle near the key 1.3000 psychological mark, representing a four-month-old descending trend-line. A convincing break through the mentioned barrier should accelerate the up-move towards the 1.3100 handle before the pair eventually aims to test its next major hurdle near the 1.3140-50 supply zone.
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