The GBP/USD pair entered a bearish consolidation phase post-Tokyo-open and now breaks sharply lower below 1.22 handle, as the bears shrug-off reports that the UK Parliament officially gives permission to begin Brexit, which finally brought in some clarity on the Brexit issue.
The spot remains heavily sold-off, as the pound fails to benefit from some good news delivered overnight, citing that the UK PM May will reject the Scottish First Minister Sturgeon's demand for a second referendum in the next two years, as reported by the Times.
Cable failed to react positively to the aforementioned headlines, as an air of cautious looms, with markets still digesting the latest comments from the UK’s Brexit minister Davis noting that his government will trigger the Article 50 by the end of this month as planned.
Also, increased nervousness ahead of the central banks’ policy decisions due in the second-half of this week, keeps the sentiment around the risk currency GBP largely undermined. The FOMC decision is due out tomorrow, while the BOE meets on Thursday for its monetary policy decision.
Meanwhile, markets remain focused on the fundamentals, with the US PPI data eagerly awaited, in absence of economic news from the UK docket.
GBP/USD Levels to consider
At 1.2171, the resistances are lined up at 1.2200/11 (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 1.2160/42 (classic S1/ Fib S2) and 1.2100 (psychological levels) and below that at 1.2050 (Flash crash territory).
- R3 1.2192
- R2 1.2182
- R1 1.2175
- PP 1.2165
- S1 1.2158
- S2 1.2148
- S3 1.2141
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