• Upbeat UK earnings data/fall in unemployment rate provided a minor lift earlier.
• Incoming Brexit headlines further boost sentiment surrounding the British Pound.
The GBP/USD pair remained well bid through the mid-European session and spiked beyond the 1.3300 handle in the last hour, albeit quickly retreated few pips thereafter.
The pair regained positive traction on Tuesday and built on the overnight bounce from sub-1.3200 level, touched in reaction to the House of Commons John Bercow's ruling to block the government’s motion for yet another vote on the UK PM Theresa May's Brexit deal.
The uptick got an additional boost from today's surprisingly stronger UK average earnings data, advancing 3.4% m/m, and drop in the unemployment rate, falling to 3.9% in January, which largely offset an unexpected jump in the number of people claiming unemployment-related benefits.
Meanwhile, the latest leg of a sudden pickup in the last hour or so could further be attributed to a Bloomberg report, saying that the EU leaders were planning to make a "contingent offer" on Brexit extension and allow May to try to get the deal through parliament next week.
However, the fact that the UK government will have to come back with substantial changes in order to get the deal passed through the Parliament, especially after the overnight dismissal of the third meaningful vote, kept a lid on any strong follow-through up-move, at least for the time being.
On the other hand, the US Dollar bulls remained on the defensive amid growing expectations that the Fed might opt for a more accommodative policy stance this week but did little to influence the price-action, albeit remained supportive of the prevalent bid tone.
In absence of any major market moving economic releases from the US, the incoming Brexit-related news/developments might continue to drive sentiment surrounding the British Pound and turn out to be an exclusive driver of the pair’s momentum through Tuesday’s trading session.
Technical levels to watch
GBP/USD
Overview:
Today Last Price: 1.3294
Today Daily change: 36 pips
Today Daily change %: 0.27%
Today Daily Open: 1.3258
Trends:
Daily SMA20: 1.3166
Daily SMA50: 1.3034
Daily SMA100: 1.2903
Daily SMA200: 1.2982
Levels:
Previous Daily High: 1.3301
Previous Daily Low: 1.3184
Previous Weekly High: 1.3384
Previous Weekly Low: 1.296
Previous Monthly High: 1.3351
Previous Monthly Low: 1.2773
Daily Fibonacci 38.2%: 1.3229
Daily Fibonacci 61.8%: 1.3256
Daily Pivot Point S1: 1.3194
Daily Pivot Point S2: 1.313
Daily Pivot Point S3: 1.3077
Daily Pivot Point R1: 1.3311
Daily Pivot Point R2: 1.3365
Daily Pivot Point R3: 1.3428
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
AUD/USD holds hot Australian CPI-led gains above 0.6500
AUD/USD consolidates hot Australian CPI data-led strong gains above 0.6500 in early Europe on Wednesday. The Australian CPI rose 1% in QoQ in Q1 against the 0.8% forecast, providing extra legs to the Australian Dollar upside.
USD/JPY sticks to 34-year high near 154.90 as intervention risks loom
USD/JPY is sitting at a multi-decade high of 154.88 reached on Tuesday. Traders refrain from placing fresh bets on the pair as Japan's FX intervention risks loom. Broad US Dollar weakness also caps the upside in the major. US Durable Goods data are next on tap.
Gold price finds support near $2,320 as US Dollar struggles ahead of data
Gold price is attempting a bounce, having found support near $2,320 in Asian trading on Wednesday. Gold price seems to benefit from the risk-rally-led weakness in the US Dollar. Downbeat S&P Global US preliminary PMIs also weigh on the Greenback, offering Gold buyers some comfort.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.