GBP/USD bounces off 1.2700 despite UK’s political uncertainty

  • Risks to PM May’s position and Brexit plan remain highlighted despite her latest efforts.
  • UK Retail sales and FOMC minutes will decorate today’s economic calendar.

Even if challenges to the UK PM May’s “new and bold” Brexit proposal remain on the card, the GBP/USD pair witnessed pullback moves from 1.27 the figure during early Asian session on Wednesday.

The British Prime Minister Theresa May tried luring members of the parliament (MPs) by producing a list of amendments she is ready to undertake in her previous Brexit proposal that was turned down. Important points among them were the rights to vote to hold a second referendum and form of a possible customs union with the EU.

Though, both the incentives couldn’t lure MPs as they were offered on the condition to first approve the present deal.

Majority of the lawmakers, including some headline Tories, immediately showed their anger towards PM May’s plan and said they’ll turn down any such proposal if it reached the parliament during the early June month.

The Sun also came out with the report mentioning that nearly 20 Tory MPs stand ready to oust Mrs. May during today’s parliament session while the opposition Labour party and Brexit party stand ready to turn down this fresh Brexit plan.

In addition to political plays, April month consumer price index (CPI) from the UK and the US FOMC minutes will also gain market attention. While CPI is expected to increase to 2.2% from 1.9% prior on a YoY basis, core CPI may also advance to 1.9% versus 1.8% earlier.

Even if the FOMC is likely to liquidate its control over neutral tone, traders may look how far the recent change in global central banks’ bias has affected the US central bank.

Technical Analysis

Multiple lows marked from January 07 highlights the importance of 1.2700 round-figure as support especially when the 14-day relative strength index (RSI) is in the oversold territory. Should the pair slips beneath 1.2700, January 15 bottom around 1.2670 and 1.2600 could be on sellers’ list to target.

On the flipside, February month low near 1.2770 acts as immediate important resistance, a break of which can recall 1.2800 on the chart.

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