• Speculations over a possible extension of Article 50 provided a short-lived boost.
• Renewed USD buying interest picks up pace after stable US consumer inflation.
The GBP/USD pair faded a knee-jerk bullish spike to weekly tops and might now be headed back towards the lower end of its daily trading range post-US CPI.
With investors looking past today's softer UK inflation figures, the pair picked up the pace during the mid-European session and rallied around 85-pips from an intraday low level of 1.2874 in reaction to fresh speculations over a possible extension of the Article 50.
As Mario Blascak, FXStreet's own European Chief Analyst explains: “The UK opposition Labor party spokesman said that his party will officially back Cooper amendment. The effort from Labor party comes as the UK strives hard to avoid a disorderly Brexit. The Cooper amendment will allow the lawmakers to pass the bill requiring Prime Minister Theresa May to seek an extension to Article 50 in the event of a no-deal Brexit.”
The rumours, however, were quickly suppressed by the UK PM Theresa May's comments at the House of Commons, reiterating that government's position is that we want to leave on 29 March, which coupled with some renewed US Dollar buying kept a lid on any further up-move.
Meanwhile, the greenback got an additional boost following the release of latest US consumer inflation figures, showing that the headline CPI eased less than expected to 1.6% y/y rate and core CPI held steady at 2.2% y/y, which resulted into a strong upsurge in the US Treasury bond yields.
Despite good two-way moves, the pair lacked any firm directional bias as investors still seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of the upcoming parliament debate, scheduled to take place on Thursday - February 14.
Technical outlook
“The GBP/USD was unable to break 1.2800 representing a 50-DMA on a daily chart and retreated back above 1.2900 level. While 1.2883 representing a 100-DMA is the short-term target, the GBP/USD needs to slide towards 1.2800 to confirm the bearish trend. On the upside, 1.2970 is expected to hold as a resistance line,” Mario added further.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.