GBP/USD consolidates in a range, just above mid-1.2800s

   “¢   UK political/Brexit uncertainties keep a lid on any meaningful up-move.
   “¢   A goodish pickup in the USD demand further collaborates towards capping.

The GBP/USD pair extended its sideways price action and is currently placed at the top end of its daily trading range, comfortably above mid-1.2800s.  

The pair was seen oscillating in a broader trading range and consolidate the previous session’s rather volatile swings, summing up to an intraday (two-way) move of nearly 500-pips, solely led by the latest Brexit/UK political developments.  

Following a historic defeat for the UK PM Theresa May’s Brexit plan, investors now believe that the March 29 Brexit deadline could be extended or the outcome could bring about a second referendum that might end up cancelling Brexit.

However, a no-confidence vote on PM May, tabled by the opposition Labor Party leader Jeremy Corbyn held investors back from placing any fresh GBP bullish bets and failed to assist the pair to build on the overnight goodish rebound of over 200-pips.

This coupled with a modest US Dollar uptick, supported by a goodish pickup in the US Treasury bond yields, exerted some downward pressure and continued capping the pair near 100-day SMA strong barrier, near the 1.2900 handle.  

Meanwhile, the pair had a rather muted reaction to the latest UK consumer inflation figures, which fell to its lowest in nearly two years and slowed to an annual rate of 2.1% in December as compared to 2.3% in November, leaving the BoE under no pressure to raise interest rates.

Technical levels to watch