GBP/USD keeps the red, but holds above 1.3200 mark post-UK CPI

   “¢   Incoming Brexit headlines continue to influence sentiment surrounding the British Pound.
   “¢   Mixed consumer inflation figures fail to provide any meaningful boost to the Sterling.

The GBP/USD pair extended the overnight retracement slide from levels just above the 1.3300 mark, with bears now eyeing a sustained break below the 1.3200 handle post-UK CPI.

The pair met with some fresh supply during the early European session and finally broke down of its early consolidation phase in reaction to the news that Labour lawmaker Alsion McGovern is tabling an emergency debate, which will allow the UK parliament to take control of the Brexit extension length away from PM Theresa May.

As Yohay Elam, FXStreet’s own Analyst explains: “UK PM Theresa May is reportedly asking for a short extension to Article 50, delaying Brexit by several months. According to the British media, she will try to pass her Brexit accord in Parliament once again, probably during the extra time. Markets prefer a longer extension that will not alter the status quo and leave the door open to a second referendum and canceling Brexit altogether.”

Meanwhile, the latest UK consumer inflation figures, coming in to show that the headline CPI held steady at 0.5% m/m and climbed more than expected by 1.9% y/y pace in February failed to provide any meaningful boost as the same was largely offset by a slight disappointment from the core CPI reading.  

The downside, however, remained limited and the pair continued finding some support ahead of the 1.3200 handle. The recent price action clearly suggests that unless we get more clarity on the duration of Brexit extension, the pair is likely to remain choppy and continue with its good two-way price swings within a broader trading range.

Technical outlook

“1.3200 provided support last week and is also a round number. 1.3110 was a separator of ranges in early March. 1.3070 provided support around the same time. 1.3010 was a swing low last week, and 1.2960 is a solid support line as it is a double-bottom.1.3270 was a high point in early March. 1.3300 is a round number and held GBP/USD down last week. 1.3350 was a high point in late February, and 1.3388 was the cycle high,” Yohay added further.