GBP/USD fails to benefit from softer USD ahead of UK/US data, Brexit parliament vote
- Rejection of the PM May’s Brexit deal increased market uncertainty over the UK’s departure process from the EU.
- MPs will again vote on Brexit indicative proposals despite failing to get any of them favored during last week.
- Manufacturing indices from the UK and the US, coupled with the US retail sales, could offer additional clues to foresee price moves.
The GBP/USD pair seesaws around 1.3030 ahead of London open on Monday. The pair recently dropped to the lowest levels in a fortnight as the UK parliament again turned down the PM Theresa May’s Brexit proposal and triggered disarray of the British exit from the EU. The members of parliament (MPs) are up for voting on various indicative Brexit proposals on Monday whereas data from the UK and the US will also be in limelight.
Despite the EU lawmakers’ clear direction to approve the UK PM May’s Brexit deal in order to get the deadline extension till May 22, the British MPs offered another humiliation to Mrs. May by rejecting her Brexit plan for third time in a raw.
The event opened another round of uncertainty as the UK now has to leave the EU on April 12 without any deal unless either PM May renegotiate the new plan or she resigns or another Brexit referendum takes place. All the three possibilities are open by now as some of the MPs are on their way to topple PM from her seat while others are preparing for another referendum.
The House of Commons will vote on various indicative Brexit proposals after the parliament approved a motion that could give it a higher authority than the government in matters related to the UK departure. During their first vote, all the eight proposals were turned down but customs union remained as a close call.
In the case of the data, the UK Markit/CIPS manufacturing purchasing managers’ index (PMI) for March month will be the first to arrive. The British manufacturing gauge may soften to 51.3 from 52.0. Following that, February month release of the US retail sales control group and March month figures for the ISM manufacturing PMI would gain market attention. The retail sales control group could weaken to 0.4% from 1.1% whereas the ISM manufacturing PMI might increase to 54.5 from 54.2.
GBP/USD Technical Analysis
Gradually recovering 14-bar relative strength index (RSI) on four-hour chart signal the quote’s pullback but buyers need to cross 50-day simple moving average (SMA) figure around 1.3095, together with surpass 1.3100 round-figure, in order to further target 1.3180 and 1.3230 resistances during additional upside.
Alternatively, 200-day SMA level of 1.2980 acts as an immediate support while a break of which can recall 1.2925, including 100-day SMA, and 1.2900 rest-points.
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.
