- GBP/USD trims some gains to 1.3215 ahead of London open on Tuesday.
- The quote rallied early-day on optimism surrounding Brexit deal.
- A slew of details/events from the UK and the US could help bulls to foresee chances of 1.3300 break.
GBP/USD witnessed pullback to test 1.3215 while heading into European sessions on Tuesday. The pair rallied to 1.3290 during early hours after reports from Strasbourg revealed that the UK PM Theresa May is likely managed to get last-minute concessions on Irish backstop and customs region from the EU Commission chief Jean-Claude Juncker. Though, buyers couldn’t rule for long as PM May is yet to counter another challenge to her Brexit proposal at the British parliament.
Early-day news reports were positive for the British Pound (GBP) as headlines showed PM May managed to get legal assurances from the EU that the UK won’t be trapped in customs union for eternity. Speculations also grew that the Irish backstop gained some favor from the EU leader.
The GBP/USD failed to hold the strength as investors doubt the actual results of May-Juncker meet ahead of the key Brexit voting where members of the UK parliament (MPs) would decide the fate of Theresa May’s hard efforts.
Should hardliners repeat what happened last month by humiliating PM May’s efforts with most votes against the deal, they will get two more voting sessions to leaving the EU without any deal and extending the Article 50 deadline on March 13 and 14 respectively.
On the data front, monthly readings of the UK gross domestic product (GDP), manufacturing production and industrial production for January will be observed closely. The GDP is likely to have grown by 0.2% against -0.4% previous dip whereas industrial production may have stalled at 0.0% versus -0.5% MoM prior. Manufacturing production is also expected to print a 0.0% mark on a monthly basis against -0.7% prior while it bears the market consensus of -2.0% against -2.1% previous on YoY.
Alternatively, the US is also scheduled to release February month inflation number, namely the consumer price index (CPI). While CPI is expected to rise +0.2% from 0.0% prior on a monthly basis, it may repeat the 1.6% figure on a yearly format. Also, the headline CPI ex-food and energy could remain unchanged at 0.2% and 2.2% on a monthly and yearly basis.
GBP/USD Technical Analysis
Successful break of 1.3300, comprising early-month high, becomes necessary for the pair to aim for 1.3350 and 1.3380 resistances.
Should prices slide beneath 1.3180, 1.3130, 1.3000 and 1.2970 may reappear on sellers’ list.