- Political noise surrounding Brexit deadline extension acts as an immediate trigger.
- British inflation data, US Fed meeting and Brexit developments will be in highlight.
The British Pound (GBP) trades near 1.3270 versus the US Dollar (USD) during early Wednesday. The GBP/USD pair has been struggling between 1.3330 and 1.3200 ever since it witnessed pullback from 1.3380 before a week. Even if the rejection of the no-deal Brexit and the UK parliament’s approval for delaying the Article 50 departure date favor the GBP, political plays at home continue to challenge buyers.
Having failed to put her Brexit proposal for voting in the British House of Commons, the UK PM Theresa May has been at a disadvantageous position as the EU lawmakers prefer having a plan while extending Brexit date from March 29.
The UK PM was supposed to attend Thursday’s EU summit with a smile on her face requesting the regional leaders to extend Article 50 date as she put forward almost same Brexit proposal to vote which was earlier rejected. However, surprise intervention by the Speaker John Bercow turned the optimism down by asking a new proposal to vote.
With this, the British political fraternity continues to jostle around first requesting the extension and then think of a new deal even if the EU is against it. This might have been the reason behind PM May’s plan to send a formal deadline extension request via mail as reported by the BBC.
Hence, speculations concerning whether the PM May submits a formal request or not and that too how many months are still active and may direct near-term trade sentiments.
Also, monetary policy meeting from the US Federal Reserve and February month consumer price index (CPI) from the UK are likely additional catalysts to watch.
The Fed isn’t expected to alter present monetary policy with 2.5% interest rate but its quarterly economic projections will be closely observed. The British CPI YoY may remain unchanged at 1.8% but could reverse prior -0.8% decline with +0.5% on a monthly basis.
GBP/USD Technical Analysis
1.3215 and 1.3190 are likely immediate supports for the GBP/USD pair, a break of which can drag the quote further down towards 1.3110 and eleven-week old trend-line support near 1.3030.
Meanwhile, 1.3310, 1.3360 and 1.3385 can limit the pair’s near-term upside.
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