- The Pound joins rest of the major currencies and rises against the greenback ahead of important data, i.e. the US GDP.
- However, a break of 1.2965/70 becomes necessary to justify recent recovery.
GBP/USD revisits 1.2900 mark while heading into the London open on Friday as investors rushed to take their greenback profits off ahead of US GDP whereas the absence of major Brexit negative news off-late also favors the pullback.
The GBP/USD pair dropped to ten-week low on Thursday as Brexit deadlock and doubts over the future position of the UK PM Theresa May continued to hurt the British Pound (GBP) against the majority of its counterparts.
On Friday, traders preferred taking their USD gains off ahead of the crucial preliminary reading of first quarter (Q1) 2019 gross domestic product.
Risk-off also took place as trade negotiations seem to stumble due to the US proposal of currency linkages to trade while discussing the deal with China and Japan.
10-year US treasury yield, mostly known as global risk barometer, struggles around 2.53%.
Other than the US Q1 2019 GDP that’s likely to flash 2.1% annualized growth versus 2.2% prior, monthly reading of the US Michigan consumer sentiment index (April) may also be observed. The consumer confidence gauge may rise to 97.0 from 96.9.
It should also be noted that there isn’t any major data from the UK, which in turn continues to emphasize Brexit as a strong catalyst for the Cable.
Recent news reports suggest that stalled cross-party talks exert additional pressure on the PM May to respect other lawmakers’ demand which also includes removing Irish backstop and/or allowing Wales a separate status from the UK.
Technical Analysis
Even if the present recovery manages to rise beyond 1.2920 immediate resistance, 100-day and 200-day simple moving average (SMA) confluence near 1.2965/70 can still challenge buyers targeting 1.3000 and 1.3030 numbers to the north.
Meanwhile, 1.2870 and 1.2830 can offer nearby supports to the prices prior to highlighting February lows near 1.2770.
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