GBP/USD: Brexit developments drive optimists towards 3-week old resistanceline, trade talks in focus
- The Brexit progress and market risk-on based upon the trade talks between the US and China favor GBP/USD buyers.
- Also, the lack of data could keep highlighting qualitative catalysts to watch.
GBP/USD is successfully holding the recent recovery intact as it trades near 1.3175 ahead of the London open on Thursday. The Cable buyers benefit from the latest positive developments surrounding the Brexit and also from the market risk-on that weigh on the US Dollar (USD). Amid a few data points on hand, traders may now focus on further trade talks and Brexit news updates to determine the near-term direction.
The British Pound (GBP) stretched its upside earlier during the day when the UK’s House of Commons approved Yvette Cooper’s Bill to appear at the upper house of the parliament, namely the House of Lords, for a further vote. The amendment rejects leaving the EU without any deal and enables the UK PM Theresa May to negotiate Brexit deadline extension with the regional lawmakers beyond April 12 in case of no-deal is agreed by then.
Traders welcomed the news reports concerning the UK PM May’s ability to unite with the opposition party to break the Brexit deadlock whereas the risk-on sentiment back by brighter expectations of the US-China trade deal added strength into the buying momentum on Wednesday.
The US 10-year treasury notes yield 2.52%, the highest since March 22, versus March 27 low near 2.35%.
Be it the Brexit discussions between the British PM May and opposition leader Jeremy Corbyn or the trade talks between the US President Trump and Chinese Vice Premier Liu He, the related headlines are likely to have an upper hand over the light economic calendar on Thursday.
Meanwhile, investors can take note of the US weekly initial jobless claims for the week ended on March 29 for short-term impulse. Forecasts signal 216K figure against 211K earlier for the first time unemployment claimers.
GBP/USD Technical Analysis
Frequent pullback and a three-week-old descending trend-line highlight 1.3200 – 1.3210 as important resistance for the GBP/USD pair traders. Should the quote manages to conquer 1.3210 resistance, 1.3270, 1.3300 and 1.3330 are likely consecutive north-side numbers to please the bulls.
It should also be noted that the dip beneath 50-day simple moving average (SMA) level of 1.3100 can give rise to a fresh pullback towards 1.3030 and 1.3000 whereas 200-day SMA level of 1.2980 might question bears then after.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
