- No-Deal Brexit regains the spotlight amid the US Dollar pullback.
- Qualitative catalysts like geopolitical tensions, trade talks and Brexit developments will be in traders’ radar to aim for 50-day SMA.
The British Pound (GBP) is on the bids around 1.3070 versus the US Dollar (USD) ahead of the London open on Monday. The GBP/USD pair recovered more than 50-pips from the intra-day low near 1.3020 as investors focused more on the USD pullback than the on-going Brexit developments.
The greenback declined against the majority of the counterparts during early-day trading as news of the geopolitical tension at Libya and the US President Donald Trump’s comments about the Mexican border pushed markets towards the Japanese Yen (JPY) and Gold.
Adding to the sentiment was Goldman Sachs report that shows lesser chances of a no-deal Brexit.
Yields of the 10-year US government bonds, often known as a risk barometer, dropped 1.1 basis points to 2.488% ahead of the Western traders arrive.
In case of the Brexit, the UK PM Theresa May is struggling with the opposition Labour party leader Jeremy Corbyn to arrive at the Brexit deal that can be acceptable by the British lawmakers.
PM May has already requested the EU for an extension to April 12 Brexit deadline for which the regional authorities are looking for a year’s time be best to offer. However, they still need a Brexit deal approved by the British politicians in order to facilitate the UK PM May.
News reports were on the go that the regional countries like France and Italy are standing ready to push the EU towards asking more tough conditions from the UK in exchange in the deadline extension.
While early-day profit-booking is already fuelling the GBP/USD pair, an expected decline in the February month US factory orders by -0.6% from +0.1% could add further strength into the buying sentiment. Though, the US fundamentals are still strong and any more positive news from the US-China trade deal could recall the USD buyers.
GBP/USD Technical Analysis
50-day simple moving average (SMA) near 1.3100 can restrict immediate upside ahead of moving market attention to 1.3155 and the downward sloping trend-line stretched since mid-March, near 1.3200.
Meanwhile, 200-day SMA level of 1.2980 becomes an important support to watch during the pair’s decline whereas 1.2930, including 100-day SMA, and 1.2900 round-figure may please sellers than after.
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