GBP/USD drops to session lows, recovers to 1.3150 as Brexit Plan B debate continues

EU's Juncker is said to tell PM May that Brady amendment won't work.
Debate on Brexit Plan B continues in the House of Commons.
US Dollar Index retreats from session highs.

Eren Sengezer FXStreet

The GBP/USD pair came under a renewed selling pressure in the last hour and dropped to a fresh session low of 1.3130 before recovering modestly. As of writing, the pair was down 0.1% on the day at 1.3150.

Several news outlets recently reported that the European Commission's President, Jean-Claude Juncker, is planning to tell British Prime Minister Theresa May that the Brady amendment, which aims at replacing the Northern Irish backstop with an alternative, wouldn't work, shutting the door on the possibility of renegotiation of the Brexit deal. "The EU is preparing to issue an immediate rebuff to Theresa May by publishing a statement rejecting any renegotiation of the withdrawal agreement in the event of the so-called Brady amendment being passed by parliament," the Guardian reported.

With investors already aware of the EU's stance on the matter, the market reaction to these headlines remained short-lived.

On the other hand, following a weak recovery attempt toward the 96 handle, the US Dollar Index lost its momentum and allowed the pair to pull away from lows. The data published by the Conference Board on Tuesday showed that the consumer confidence in the U.S. continued to deteriorate in January. Ahead of tomorrow's FOMC meeting, the greenback is unlikely to find strong demand.

Technical levels to consider

The initial support for the pair aligns at 1.3130 (daily low) ahead of 1.3015 (Jan. 24 low) and 1.2965 (200-DMA). On the upside, resistances are located at 1.3200 (daily high/psychological level), 1.3260 (Oct. 12, 2018, high) and 1.3300 (Sep. 20, 2018, high).

Author

Eren Sengezer

FXStreet

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.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD picks up extra pace north of 1.1400

EUR/USD extends its recovery past 1.1400 the figure as the NA session draws to a close on Monday. Indeed, the pair advances for the third straight day amid the persistent offered bias in the US Dollar. Meanwhile, market participants keep gearing up for the ECB Forum in Sintra and the release of critical US labour market data.

Gold bears flirt with $4,000 as Iran tensions and Fed hike bets support USD

Gold remains under some selling pressure for the second straight day on Tuesday, with bears awaiting a sustained break below $4,000 before positioning for deeper losses. Renewed US-Iran hostilities over the weekend cast doubts over the sustainability of the peace deal. This, along with elevated expectations for Fed rate hikes, offers some support to the US Dollar and keeps the bullion within striking distance of the YTD low, touched last week.

Bitcoin stalls at $60K as buyer conviction fades, Strategy authorizes BTC sales

Bitcoin is trading around the $60,000 level on Monday after a sharp decline last week. With the top crypto struggling to recover, analysts suggest the market remains firmly in defensive territory as investors await stronger signs of demand.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.