The GBPUSD pair saw a sharp downward price action yesterday. While the passing of copper amendment in UK parliament earlier this week influenced some level of positive price action, the rally was for naught. The pair failed to breach 1.32 handle once again earlier this week and this resulted in sharp declines. Investors await headlines hinting at solid progress on Brexit front. With April 12 deadline approaching closer each passing day, the influence from positive headlines fails to linger for a longer period of time unlike before. Since EU has already granted a deadline extension once and there have been no attempts from UK PM May to request another deadline extension, traders are beginning to wonder if the UK will really see a hard Brexit.
Range Bound Action To Continue Owing To Lack Of Solid Progress in Brexit
A lack of update on progress post collaboration between PM May and opposition party leader Jeremy Corbyn has resulted in all positive influence gained from the update completely evaporating in the market. Meanwhile, optimism surrounding Sino-U.S. trade talk related headlines which had been providing support for market bulls from the international market has also eased away owing to lack of headlines hinting at details on solid progress. While there are comments from US officials on trade talks seeing positive progress, traders have gotten used to this vague comment and this update is no longer able to saw market bulls. With US Dollar growing stronger in the market, the pair has maintained range-bound price action slightly above previous session lows in Asian market hours.
Hopes and expectations that the UK will find a way to alleviate concerns on hard Brexit outcome today helped British Pound recover further, during late Asian, early European market hours. As of writing this article, GBPUSD pair is trading flat at 1.3083 up by 0.04% on the day. While Brexit headlines remain the main driving force and controlling factor behind Sterling bulls, traders are looking at macro data updates for short term profit opportunities and trading cues as the trading session comes to close for the week. UK calendar will see the release of Halifax house price index data while the US calendar will see the release of NFP update, Average hourly earning index data and unemployment rate update. In immediate and near future trading sessions the pair will continue to trade range bound trapped between 1.3200 and 1.3000 handle unless there is solid progress on Brexit front. Expected support and resistance for the pair are at 1.3060, 1.3028, 1.3000 and 1.3125, 1.3165, 1.3200 handles respectively.
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