“¢ Builds on Friday’s goodish bounce from the very important 200-day SMA support.
“¢ Upbeat UK manufacturing PMI provided an additional boost to the British Pound.
“¢ Focus remains on the second Brexit indicative vote, expected to start at 8 pm.
The GBP/USD pair continued gaining positive traction through the mid-European session and is currently placed at the top end of its daily trading range, around the 1.3120 region.
The pair caught some fresh bids on the first trading day of a new trading week and built on Friday’s goodish bounce from the very important 200-day SMA, touched after the UK Parliament rejected Theresa May’s Withdrawal agreement for the third time.
Despite her promise to resign in exchange for support, May failed to convince lawmakers to back her Brexit deal. However, the fact that she succeeded to narrow the scale of the margin of her defeat to 58, from 149 a few weeks ago, extended some support to the British Pound.
The upbeat mood around the Sterling got an additional boost following today’s release of better than expected UK manufacturing PMI print, which climbed to a 13-month high level of 55.1 in March as compared to previous month’s reading of 52.1 and 51.0 expected.
With today’s UK macro data out of the way, investors will continue to seek more clarity on the impending Brexit issue and hence, the key focus will remain on another round of indicative votes on proposals selected by the Speaker, expected to start around 8 pm.
The results will be announced at some point after 9:30 pm, which should play an important role in driving the near-term sentiment surrounding the British Pound and infuse a fresh bout of volatility across GBP pairs.
In the meantime, today’s US economic docket, highlighting the release of monthly retail sales data and ISM manufacturing PMI, might influence the US Dollar price dynamics and produce some short-term trading opportunities during the early North-American session.
Technical levels to watch
As Yohay Elam, FXStreet’s own Analyst, writes, “cable faces significant resistance at 1.3129 where we see the convergence of the Simple Moving Average 200-4h, the Pivot Point one-day Resistance 1, and the Fibonacci 38.2% one-month. If GBP/USD can break higher, the next cap is at 1.3211 where we see the Pivot Point one-day Resistance 2, the PP one-week R1, and the Fibonacci 61.8% one-month.”
“Looking down, support is close, at 1.3095 which is the confluence of the Fibonacci 38.2% one-week, the Bollinger Band 1h-Upper, and the previous 15-low converge. The next considerable support line is at 1.3040 where the BB 1h-Middle, the SMA 5-4h, and the Fibonacci 38.2% one-day converge,” he added further.
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