- PM May’s plan to unite with opposition gained little fame.
- 200-day SMA continues to remain as the strong support around 1.2980 with 1.3150/55 likely limiting an upside towards 1.3200.
The British Pound (GBP) trades near 1.3130 versus the USD during early Wednesday. The GBP/USD pair earlier took benefit of the news report that the UK PM Theresa May is proposing cross-party handling to break the Brexit deadlock but could surpass 1.3150/55 area comprising latest highs as Tory members seem divided on her plan.
Reports that the UK PM May discussed Brexit plans and look forward to support to the opposition leader Jeremy Corbyn initially boosted the GBP traders’ sentiment on likely softer Brexit. However, optimism couldn’t last long as Tories rebelled against Mrs. May’s plan.
The Guardian notes that the Conservative party’s largest Eurosceptic grouping, the European Research Group (ERG) doubted that they could support a subsequent deal if helped by the opposition leader. The same view was previously conveyed by the ex-Foreign minister Boris Johnson.
With this, traders fear for further Brexit drama ahead of Friday’s another round of voting at the parliament.
At the economic front, the headline Markit services purchasing managers’ index (PMI) from the UK and ADP employment change from the US are likely important data to watch.
While the British services PMI is expected to decline to 50.9 from 51.3 prior during March, the US ADP employment change could also soften to 170K from 183K during the same period.
GBP/USD Technical Analysis
Even if 1.3150/55 limits immediate upside of the pair, buyers can’t be crossed unless 200-day simple moving average (SMA) remains untouched. As a result pair’s rise to 1.3200, 1.3270 and 1.3330 can’t be denied if it manages to clear 1.3155 nearby resistance.
Alternatively, 50-day SMA level of 1.3100 and 1.3055 may offer intermediate halt during the quote’s decline towards 200-day SMA level of 1.2980. Pair’s break of 1.2980 can recall 1.2930 and 1.2900 on the chart.
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