- GBP struggles to find demand as Brexit uncertainty keeps investors away.
- US Dollar Index looks to close the day in the positive territory near 94.70.
The GBP/USD pair broke below the 1.32 handle on Tuesday and touched its lowest level since November of 2017 at 1.3150 and failed to make a meaningful recovery. As of writing, the pair was trading at 1.3175, losing 75 pips, or 0.55%, on the day.
Speaking to BBC Radio earlier today, Dominic Grieve, a leading pro-European Union lawmaker in Britain’s ruling Conservative Party, said that he didn’t want the UK to leave the EU without a deal but warned that the government had to be prepared for that outcome as well. On Wednesday, Prime Minister Theresa May will be facing lawmakers who want to be able to negotiate a deal with the EU if the government fails to do so.
Tomorrow, the only data release from the UK will be the CBI Industrial Trends Survey. However, investors are likely to wait for headlines from the Parliament before taking any positions.
On the other hand, the greenback continues to take advantage of the hawkish stance that the Fed adopted last week. Following yesterdays corrective slide, the US Dollar Index gathered momentum and tested the 95 handle on Tuesday. Toward the end of the NA session, the DXY was moving sideways near the 94.70 mark, where it was up 0.3% on the day.
Technical levels to consider
On the downside, the initial support for the pair aligns at 1.3135 (Nov. 16, 2017, low) ahead of 1.3100 (psychological level) and 1.3040 (Nov. 3, 2017, low). Meanwhile, resistances could be seen at 1.3200 (psychological level), 1.3270 (daily high) and 1.3334 (20-DMA).
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