- The Brexit deadline extension plays positive for the Pound ahead of the final confirmation from the EU summit.
- Political plays at home and the US second-tier data can be watched for fresh impulse.
The GBP/USD pair is trading near 1.3090 during the early Asian session on Thursday. While dovish sentiment surrounding the Fed, soft US data and optimism for long Brexit extension helped the Pound to remain positive so far, traders still await final confirmation from the EU summit. Additionally, cross-party Brexit talks at the UK and second-tier data from the US will also be in the spotlight.
Softer than expected figures of the US consumer price index ex-food and energy, better known as Core CPI, portrayed inflation pressure tilted to the downside and may support the Fed’s cautiously on hold view as conveyed by the recent FOMC (Federal Open Market Committee) meeting minutes.
Other than soft data from the US, optimism surrounding the long Brexit extension at the EU summit also favored the British Pound (GBP). Most of the leaders of 27 EU nations, except France, are in support of allowing another year to the UK for settling the terms of departure and leave the region with the flexibility to depart early if wished. However, a final confirmation is yet to receive as the meeting is going on.
While deadline extension is likely good news for the Cable, uncertainty surrounding the future Brexit plan at home can still doubt the recovery as some of the EU leaders want the British lawmakers to break the Brexit deadlock in order to avail further concessions from the regional board.
The cross-party talks between the ruling Tories and the opposition Labour party are going nowhere. Negotiations are to continue on Thursday when the PM returns from the EU summit.
Also up in the radar will be the weekly US initial jobless claims reading that is expected to increase from 202K to 211K.
GBP/USD Technical Analysis
The April 04 high near 1.3130 and a month-old descending trend-line near 1.3155 are likely immediate resistances for the pair, a break of which can recall 1.3180 and 1.3200 on the chart.
Meanwhile, 1.3015, 200-day simple moving average (SMA) figure of 1.2975 and 1.2940 comprising 100-day SMA could limit the pair’s near-term declines.
Share
