“¢ Brexit uncertainty keeps a lid on any meaningful recovery.
“¢ Persistent USD buying further contributes towards capping gains.
The GBP/USD pair managed to recover around 40-pips from fresh YTD lows, albeit struggled to build on the momentum and remained capped below the 1.3200 handle.
After spending the majority of Tuesday’s trading session in a narrow trading range, the pair finally gained some respite and ticked higher ahead of the crucial EU withdrawal bill vote in the House of Commons.
Against the backdrop of the huge uncertainty surrounding a ‘meaningful vote’ on Brexit, a follow-through US Dollar uptick was seen keeping a lid on any meaningful up-move for the major.
Moreover, investors also seemed reluctant to place any aggressive bets and preferred to wait for the BoE‘s latest monetary policy update, due to be announced on Thursday.
Meanwhile, the market reaction to the release of US current account trade data, coming in to show a lower-than-expected deficit of $124 billion, turned out to be rather muted, with the pair hanging within striking distance of the lowest level since Nov. 2017.
Today’s US economic docket also features the release of existing home sales data but again is unlikely to provide any meaningful trading opportunities ahead of the key event risks lined up over the next 24-hours.
Technical levels to watch
A subsequent recovery beyond the 1.3200 handle is likely to confront strong hurdle near the 1.3230-40 region and is followed by weekly highs resistance near the 1.3275-80 zone.
On the flip side, the 1.3150-45 region might continue to act as an immediate support, which if broken might turn the pair vulnerable to accelerate the slide towards challenging the 1.3100 handle.
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