- Sterling catches a lift on positive Brexit news, but volatility is still a risk play.
- US Dollar is becoming difficult to trust as market sentiment twists.
The GBP/USD is walking back slightly after catching a bump through the early Asia session on news that a “hard Brexit” scenario may be avoided, but the pair is falling back into the 1.3550 ahead of the London markets.
The UK’s Parliament has announced they will be telling the European Union they are planning to stay in the European customs union, a move that averts the risk of a hard-Brexit scenario, but will leave hard-line Brexiteers riled up. The move also belies the disorganization within the British Parliament as concessions and agreements become increasingly difficult to secure for Prime Minister Theresa May.
UK manufacturers attack post-Brexit customs plan – FT
The calendar is clear for Thursday’s markets and the Sterling has to contend with a shifty Greenback, which is flopping risk sentiment as US Treasury yields hit multi-year highs and trade talk between the US and China continues to remain inconclusive.
GBP/USD levels to watch
With the Sterling continuing to spread its bets within a technical range for most of May, the pair is split on technicals, and as FXStreet’s Omkar Godbole noted about the pair’s technical barriers, “immediate resistance is seen at 1.3618 (May 10 high) ahead of 1.3712 (March 1 low) and 1.3765 (Feb. 9 low). On the downside, support is seen at 1.3529 (5-day MA), 1.3483 (Asian session low) and 1.3451 (May 15 low).”
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