GBP/USD regains bids amid weaker USD, Brexit weighs

Dhwani Mehta FXStreet

The GBP/USD pair is attempting a minor-break higher from the downside consolidative mode seen since Asia open this Monday, and now challenges highs near 1.2180 region amid continued broad USD correction, triggered by not so impressive US jobs data.

Despite upbeat headline NFP numbers (235k vs. 200k exp), the wage price data disappointed and raised doubts over a March Fed rate hike. However, the US labor market data remains solid, with resorting to profit-taking on the USD longs ahead of Wednesday FOMC decision.

On the GBP-side of the story, any recovery remains short-lived amid weekend’s WSJ reports, citing that the UK PM Theresa May could trigger the Article 50 tomorrow, after the UK's Brexit Minister Davis called on lawmakers to vote to drop amendments that were added to the Brexit bill. Lingering uncertainty over the Brexit process will continue to undermine the sentiment around the pound.

Looking ahead, we have an eventful week, dominated by central banks’ policy decisions, with the Fed and BOE outcomes eagerly awaited for fresh direction on cable. In the meantime, developments surrounding the Brexit process will have a strong impact on the GBP markets.

GBP/USD Levels to consider

At 1.2177, the resistances are lined up at 1.2200/15 (round figure/ 10-DMA) and 1.2250/53 (psychological levels/ Mar 7 high) and above that at 1.2304 (Mar 6 high). On the flip side, the resistances are aligned at 1.2150/44 (Fib S3/ classic S3) and 1.2100 (psychological levels) and below that at 1.2050 (Flash crash territory).

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2166

55% Bullish
45% Bearish
0% Sideways

Bias Bullish

1 Month

Avg Forecast 1.2205

29% Bullish
43% Bearish
29% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.2171

35% Bullish
35% Bearish
30% Sideways

Bias Neutral

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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