• A sudden pickup in the USD demand prompts some intraday weakness.
• Brexit delay continues to lend some support and helped limit the downside.
• The focus will remain on the third meaningful vote, now expected next week.
The GBP/USD pair quickly reversed an early European session dip to an intraday low level of 1.3081 and rallied over 80-pips in the last hour, albeit retreated few pips thereafter.
A sudden pickup in the US Dollar demand, triggered by awful German/Euro-zone PMI-led sharp intraday slide in the shared currency, turned out to be one of the key factors behind the pair's sharp intraday slide on the last trading day of the week.
However, the fact that the EU leaders, at the March European Council meeting on Thursday, granted an extension to the Article 50 negotiating period until 12 April extended some support to the British Pound and helped limit deeper losses.
The pair showed remarkable resilience below the 1.3100 handle, rather attracted some aggressive bids and jumped beyond mid-1.3100s, though lacked any strong bullish conviction amid expectations that the UK PM May struggle to pass the relevant legislation.
Hence, the key focus will be on the third meaningful vote on May's withdrawal agreement, now expected to be held next week - likely on Tuesday or Wednesday, which might further collaborate towards capping any meaningful up-move, at least for now.
Technical levels to watch
Yohay Elam, FXStreet's own Analyst provides important technical levels to trade the major: “If GBP/USD were to fall, the next cushion is at 1.3063 which is the confluence of the BB 1h-Lower, the SMA 50-1d, and the Fibonacci 23.6% one-day. More substantial support awaits at 1.3003 where we see the Pivot Point one-day S1, the previous daily low, and the BB one-day converge.”
“Looking up, pound/dollar will face considerable resistance at the 1.3214 to 1.3227 region. We see a dense cluster including the BB 4h-Middle, the SMA 200-1h, the Fibonacci 23.6% one-month, the SMA 100-1h, the Fibonacci 38.2% one-week, the PP one-day R1, and the SMA 5-one-day. Further above, 1.3289 is an upside target with the Fibonacci 38.2% standing out,” he 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 regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.