- GBP/USD trades near 1.3250 before the London open on Wednesday.
- The pair witnessed pullback from the five-month high on lack of major catalysts during early-day.
- Fewer UK events are lined up for release than their US counterparts to observe.
The GBP/USD pair trades around 1.3250 heading towards Europe open on Wednesday. The British Pound (GBP) was the best performer among G10 currencies on Tuesday after the UK PM Theresa May provided British lawmakers an option to delay Brexit. However, GBP/USD, mostly known as the Cable, witnessed pullback from its 1.3290 high as lack of major catalysts during early-day trading pushed investors toward profit-booking.
GBP/USD rallied to a five-month high on Tuesday after PM May gave fellow members of the parliament (MPs) an opportunity to vote for a no-deal Brexit (March 13) and a delayed departure from the EU (March 14) in case her initial proposal gets rejected on March 12.
The US Dollar, on the other hand, was treading water on the absence of fresh details from the Fed Chair’s testimony and disappointing housing start numbers.
Looking forward, investors have fewer UK catalysts to observe during the rest of the day. British MPs are likely to vote on the PM May’s yesterday’s motion and opposition might propose the second referendum. However, these two events carry less importance considering yesterday’s outcome.
As compared to the UK, there are few more catalysts from the US. They include the second appearance of the Fed Chair for semi-annual testimony, details from the US President Donald Trump’s North Korea visit, monthly pending home sales and factory orders. It should also be noted that Trump’s former fixer and lawyer Michael Cohen is also scheduled to testify before the Senate Intelligence Committee about the hush money paid to adult-film actress Stormy Daniels.
While the news from Cohen’s testimony is likely to weigh on updates from Trump-Xi meet, the Fed Chair is expected to repeat yesterday’s statement. On the economic front, January month pending home sales MoM may register +0.2% increase over -0.1% previous contraction whereas factory orders are expected to have increased by +0.5% during December than -0.6% decline in November.
GBP/USD Technical Analysis
In addition to the recent high near 1.3290, September 2018 landmark figure of 1.3300 should also be surpassed in order to validate the pair’s surge to 1.3365 and the 1.3400 levels to the north.
On the downside, 1.3230 and 1.3200 are likely nearby supports for the pair, a break of which highlights 1.3100 and 1.3080 as supports.
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