|

GBP/USD bounces back above 1.24

The GBP/USD pair stayed in a 100 pip range on the day of Brexit. After leaping to 1.2475 during the European session, the pair came under renewed selling pressure and dropped to its daily low at 1.2375. As of writing, the pair was down 0.15% at 1.2430.

Article 50 triggered

Although the pair gained some upward momentum after UK's PM Theresa May officially triggered Article 50 by giving the letter to Donald Tusk, President of the European Council, it struggled to extend this move. The heavy sell-off witnessed in the EUR/USD following some ECB headlines suggesting a less likelihood of monetary tightening at the end of the year, allowed the greenback to rally against its other European counterparts as well.

Furthermore, a leaked copy of the European parliament's resolution document showed that there wouldn't be any free trade arrangements with Britain in the next two years. UK's Society of Manufacturers and Traders quickly responded by stating that this was the most significant threat to the competitiveness of the UK automotive sector in a generation. 

Donald Tusk Press Conference UK Notification - Brexit Reaction Statement

The greenback also received an additional boost from the positive data from the United States, which showed that Pending Home Sales Index jumped to its highest level since April at 112.3. During the remainder of the NA session, markets will be keeping a close eye on speeches by Boston Fed E.Rosengren (2019 voter, dovish) and San Francisco Fed J.Williams (2018 voter, centrist).

Technical outlook

The first support for the pair is aligned at 1.2405/10 (50-DMA/100-DMA) followed by 1.2340 (Mar. 21 low/20-DMA) and 1.2300 (psychological level). On the upside, a break above 1.2450 (Fib. 61.8% of Dec/Jan drop) could extend towards 1.25 (psychological level) and 1.2560 (Mar. 27 high).

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1870 during the Asian hours on Friday. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming steady momentum. RSI has eased but remains above 50, indicating momentum remains constructive for the bulls.

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

Gold recovers swiftly from weekly low, climbs back closer to $5,000 ahead of US CPI

Gold regains positive traction during the Asian session on Friday and recovers a part of the previous day's heavy losses to the $4,878-4,877 region, or the weekly low. The commodity has now moved back closer to the $5,000 psychological mark as traders keenly await the release of the US consumer inflation figures for more cues about the Federal Reserve's policy path.

Bitcoin, Ethereum and Ripple stay weak as bearish momentum persists

Bitcoin, Ethereum and Ripple remain under pressure, extending losses of over 5%, 6% and 4%, respectively, so far this week. BTC trades below $67,000 while ETH and XRP correct after facing rejection around key levels. With bearish momentum persisting and prices staying weak, the top three cryptocurrencies continue to show no clear signs of a sustained recovery.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Aster Price Forecast: Demand sparks on Binance Wallet partnership for on-chain perpetuals

Aster is up roughly 9% so far on Thursday, hinting at the breakout of a crucial resistance level. Aster partners up with Binance wallet for the second season of the on-chain perpetuals challenge.