- Receding fears of no-deal Brexit please the Pound buyers ahead of the crucial EU summit.
- In addition to Brexit, the US and the UK economic data will also entertain momentum traders.
The GBP/USD pair is recovering earlier losses to trade near 1.3060 during early Asian session on Wednesday. The British Pound (GBP) buyers recently welcome brighter chances of a long extension to the Brexit deadline. However, today’s EU summit and key data from the UK and the US will be in the spotlight for the day.
No final results of the cross-party Brexit talks challenged the GBP traders’ optimism on Tuesday while speculations that France will be hard against the UK request added further weakness into the GBP/USD pair.
However, a news report that both the houses of the UK parliaments approved the British Prime Minister Theresa May to request Brexit deadline extension to June 30 and Reuters report that the EU prefers offering the departure stretch till March 30, 2020, helped the Pound recover recent losses.
Looking forward, the UK gross domestic product (GDP), industrial production and manufacturing production for February will be the first in the data-line to entertain GBP/USD traders. Monthly details of the British GDP may weaken to 0.0% from 0.5% whereas industrial production (MoM) could soften to 0.1% versus 0.6% prior. Further, manufacturing production growth might also decline to 0.2% from 0.8% earlier on an MoM basis.
Stretching the data dossier will be the US consumer price index (CPI) details. The US CPI (YoY) may rise to 1.8% from 1.5% during March while the ex-food and energy version of the inflation figure, better known as the Core CPI, isn’t likely to deviate from 2.1% earlier outcome.
Minutes of the March month FOMC meeting could also direct the pair moves. The Federal Open Market Committee (FOMC) disappointed USD bulls by signaling no rate-hikes in 2019 and only one in 2020 during its latest meeting. Investors may search for clues as to how strong the bears rule among Fed policymakers.
Apart from the data, the EU summit on Brexit will be a key event as well. As per the recent market reports, the regional leaders are ready for a long Brexit extension with flexible departure, popularly called Flextension. Though, France is likely to play its role of a hurdle and might use the UK PM May’s inability to bring any raw plan as a point.
GBP/USD Technical Analysis
Unless providing a successful break of 50-day simple moving average (SMA), at 1.3090 now, the quote isn’t expected to aim for four-week long descending trend-line around 1.3170.
On the contrary, 200-day and 100-day SMA levels of 1.2975 and 1.2935 could keep restricting the pair’s near-term declines.
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