- GBP/USD is trading in a relatively tight range of between 1.3061/87.
- A rocky road ahead on further Brexit voting in The Commons.
Overnight, it was another loss for UK Prime Minister May which now means lawmakers are likely to push for a delay to the 29 March deadline. However, 149-vote loss sets the bar seriously high for Theresa May to turn the tables around.
- GBP dropped to 1.3005 on the legal opinion and flickered up to 1.3310 after the parliamentary vote overnight.
Analysts at ING Bank argued that the chances of May’s deal passing are relatively low – “But we certainly wouldn’t rule out a third attempt at a meaningful vote over the next couple of weeks – Ultimately, Parliament will still need to make a decision on which Brexit option to pursue – “We wouldn’t rule out a third meaningful vote in coming weeks, but in the end, we still think a softer Brexit has the highest chance of prevailing,” the analysts at ING Bank explained.
Meanwhile, analysts at Westpac argued that this opens the potential for uncomfortable votes over the next two days that could further undermine May’s premiership and maintain current levels of uncertainty into the EU Summit on 21-22 March around the 29 March Article 50 deadline.
Elsewhere, and earlier in the day, the US CPI data was a weight on yields and the dollar. US consumer prices headline Feb CPI was arriving at a benign 0.2% m/m gain while the core index posted a lower than expected 0.1% gain; the annual core pace moderated a touch to 2.1% from 2.2%.
GBP/USD levels
“The 4 hours chart shows that the pair is now struggling to surpass a directionless 20 SMA at around 1.3090, while the 200 EMA keeps rejecting attempts of breaking lower. Technical indicators in the mentioned chart are bouncing modestly from around their midlines, limiting chances of a downward extension ahead, but lacking enough strength to support an upcoming advance. Nevertheless, wide intraday ranges alongside high volatility are expected to continue during the upcoming days,” –
explained Valeria Bednarik, Chief Analyst at FXStreet.
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