GBP/USD recovers around 35-40 pips from daily lows, but remains well below 1.3300 mark

   “¢   Faces rejection near 1.3300 mark amid uncertainty over Article 50 extension.
   “¢   Hammond’s comments add to the GBP selling bias and exert additional pressure.
   “¢   The downside remains limited ahead of this week’s (possible) meaningful vote.

The GBP/USD pair maintained its heavily offered tone through the mid-European session, albeit has managed to rebound around 35-40 pips from daily lows set in the last hour.

The pair failed to capitalize on Friday’s goodish up-move and faced rejection near the 1.3300 handle amid some renewed selling pressure surrounding the British Pound in wake of not so optimistic comments by the UK Finance Minister Philip Hammond.

In an interview with BBC on Sunday, Hammond was noted saying that the government will bring the Brexit deal back for a meaningful vote only if we’re confident enough of our colleagues and the DUP are prepared to get it through the Parliament.

Hence, the key focal point for GBP traders will be on the UK PM Theresa May ability to gather enough support for the meaningful vote or, as Eurosceptic UK lawmaker John Redwood believes – there are a lot of people still opposed to May’s deal and go beyond the European Research Group (ERG).

It is worth reporting that if the UK parliament rejects May’s Brexit deal for the third time, the government will be forced to request a longer extension, which would further prolong Brexit uncertainties and dent sentiment surrounding the British Pound.  

Unless there is more clarity over the duration of the Article 50 extension, the pair seems more likely to continue with its choppy trading action within a broader trading range held over the past couple of trading sessions.

Technical outlook

Yohay Elam, FXStreet own Analyst writes: “While some of the Momentum has disappeared after the fall, the four-hour chart still shows Pound bulls are in control. The Relative Strength Index is above 50 and the pair trades above both the 50 and 200 Simple Moving Averages.”

“1.3270 provided some support when the pair traded at higher ground. 1.3300 is a round number and also capped cable at the wake of the new week. 1.3350 was a high point in late February and 1.3388 was the fresh peak. Looking down, 1.3200 was the low point on Friday. 1.3110 separated ranges early in the month. 1.3070 is approximately where the 200 SMA meets the chart. 1.3010 was a swing low last week,” he added further.