“¢ The incoming Brexit headlines driving sentiment surrounding the British Pound.
“¢ UK confirms that it will leave customs union when it leaves EU.
“¢ Irish backstop should come to an end in Dec 2021.
The GBP/USD pair reversed a dip to sub-1.3400 level and quickly recovered around 60-pips from session lows touched in the last hour.
Earlier during the European trading session, the pair retreated from over 2-week lows and nosedived to an intraday day low level of 1.3375 on rumours that the Brexit Secretary David Davis might resign.
The recovery was equally sharp on the back of news that the Irish backstop has been amended and should end by Dec. 2021. The headlines suppressed speculations over the exit of a key eurosceptic minister and extended some support to the British Pound.
Currently trading around the 1.3430-35 region, the pair had a rather muted reaction to the release of usual weekly initial jobless claims data from the US, with the incoming Brexit headlines turning out to be an exclusive driver of the pair’s volatile price-action on Thursday.
Technical levels to watch
Any subsequent up-move beyond the 1.3460 area would reinforce the near-term bullish bias and should assist the pair to extend the upward trajectory towards reclaiming the key 1.3500 psychological mark.
On the downside, sustained weakness back below the 1.3400 handle, leading to a subsequent break below session lows support near the 1.3375 region, might turn the pair vulnerable to head back towards retesting the 1.3300 round figure mark.
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