Search ForexCrunch
  • EU confirms Brexit deadline extension from March 29 making the UK parliament a crucial entity to direct the future dates of departure.
  • The GBP/USD pair bounces off the 1.3060/65 support-line but still has to cross 1.3180 and 1.3230 in order to justify its strength.

The GBP/USD pair trades near 1.3120 at the start of Asian sessions on Friday. The quote recently witnessed pullback from 1.3000 round-figure and is holding above 1.3100 off-late as latest reports say the EU proposes two-factor Brexit deadline extension plan. No major data is scheduled for release from the Britain while there are only few statistics to watch from the US, leaving highlights on Brexit.

At the end of much drama concerning the Brexit deadline at the EU summit, the regional leaders finally agree to a two-factor approach that offers an unconditional Brexit delay until April 12 and helps the British Pound (GBP) to recover some of the latest losses. As per the draft proposal, the EU is ready to offer a Brexit extension till April 12 by then the PM Theresa May has to acquire parliament support for her deal in order to remain in the region till May 22. If Mrs. May fails to gain House of Commons’ support for her plan, April 12 is the last day for the British economy as the regional member.

The GBP declined most among G-10 currencies on Thursday as the EU lawmakers continued to struggle over the final date to give to the UK for leaving the regional boundary as opted before two years. Looses were also mounted as the US initial jobless claims and Philadelphia Fed manufacturing survey flashed welcome numbers. It should also be noted that the Bank of England (BOE) left its monetary policy unchanged, as expected, while giving higher importance to Brexit for directing future moves.

Traders have fewer details/events to watch over during rest of the day that continues to highlight Brexit headlines for near-term trade direction. However, US Markit PMI and existing home sales could offer intermediate moves.

The US Markit preliminary manufacturing purchasing manager index (PMI) for the current month may rise to 53.6 from 53.00 prior whereas services PMI might not deviate from its 56.0 level.

Further, the composite PMI could weaken to 55.2 from 55.5 while existing home sales may increase to 5.10M during February from 4.94M registered in January month.

GBP/USD Technical Analysis

Not only eleven-week old ascending trend-line and 50-day simple moving average (SMA) around 1.3060/65 but 1.3000 and 200-day SMA figure of 1.2980 could also limit the GBP/USD pair’s downside.

Alternatively, 1.3180, 1.3230 and 1.3280 are likely nearby resistances that the quote should cross in order to aim for 1.3320 and 1.3375/80.