GBP/USD rebounds from 1.3200 neighborhood, focus remains on Article 50 extension vote

   “¢   Intraday bullish spike quickly fizzles out amid confusion over the duration of Article 50 extension.
   “¢   Tusk said to push for longer extension; May to opt for short delay if deal approved by March 20.

The GBP/USD pair faded an early European session knee-jerk bullish spike and tumbled to fresh session lows, closer to the 1.3300 handle in the last hour, albeit quickly recovered few pips thereafter.

The pair did get a goodish lift and surged to an intraday high level of 1.3331 in reaction to unconfirmed news that the DUP is considering to support the government’s deal. The uptick quickly fizzled out, rather met with some aggressive selling pressure and the pair erased a major part of the overnight strong gains posted after the UK Parliament voted for a non-binding motion to reject the idea to leave the European Union without a trade deal.  

Despite a vote to reject a no-deal Brexit, confusion over the duration of Article 50 extension was seen as one of the key factors affecting negatively on the British Pound. The European Council President Donald Tusk was noted saying that he will push for a longer extension and the UK PM Theresa May emphasized for a short delay if a deal is approved by March 20. Meanwhile, the UK government spokesman said that May would put her Brexit deal back to the Parliament for a third vote if she thought it would win support

The bearish pressure now seems to have abated, at least for the time being, and the pair managed to find decent support just ahead of the 1.3200 round figure mark to recover around 25-30 pips from daily swing lows. It would now be interesting to see if the pair is able to attract any follow-through buying as market participants now look forward to this week’s final key vote on an extension of the fast-approaching March 29 Brexit deadline.  

Technical levels to watch