Thereafter, the spot turned back lower to find fresh support just ahead of the mid-point of 1.26 handle, now looking to extend the bids near 1.2680 levels ahead of the European opening bells.
The UK political drama once again takes center-stage and keeps the pound depressed, keeping the GBP/USD bounce limited. Despite the Democratic Unionist Party (DUP) lawmaker Jeffrey Donaldson’s overnight comments that talks between May and his party are making progress, uncertainty continues to prevail as investors look forward to Theresa May’s speech on post-Brexit Citizens' right plan today.
Moreover, with Theresa May facing revolt over the legislation to smooth UK’s exit from the single market, cable will once again remain exposed to downside risks, in absence of fresh fundamental drivers from the UK docket.
Further, all eyes remain on the UK PM May’s meeting with the EU leaders in Brussels today, as she will outline her plans for the issue of expats' rights after Brexit. Meanwhile, the US jobless claims and Fedspeaks will provide some trading impetus in the NA session.
GBP/USD levels to consider
Karen Jones, Analyst at FXStreet explained, “GBP/USD is neutralising very near term. The market has executed a 50% retracement (1.2579) and is bouncing from here. There is scope for its 200 day ma at 1.2552, but we note the daily RSI has diverged and this reflects a loss of downside momentum and for caution will exit remaining short positions. The market stays directly offered below its 55 day ma at 1.2802 and 20 day ma at 1.2816.”
“The previous range 1.2775-1.3060 should now act as formidable nearby resistance. Below the 200 day ma would allow for losses to extend to the 1.2506 9 month support line and 1.2468/61.8% retracement. There is potential for the 1.2366 the 10th April low ,” concluded Karen.
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