“¢ The prevalent USD selling bias continues to lend some support.
“¢ GBP remains underpinned by reports of a possible Brexit delay.
“¢ Bulls lack strong conviction ahead of May’s scheduled speech.
The GBP/USD pair extended its sideways consolidative price action and remained capped below the 1.3100 handle through the mid-European session on Monday.
The US Dollar held on the defensive amid growing optimism over a possible resolution to the long-standing US-China trade disputes and was seen as one of the key factors behind the pair’s mildly positive tone at the start of a new trading week.
The British Pound was further supported by the weekend media reports, saying that Brexit could be delayed until 2021 under plans being explored by the EU’s most senior officials, albeit lacked any strong bullish conviction or a follow-through buying.
The pair struggled to build on Friday’s strong intraday bounce of over 110-pips as investors still seemed reluctant to place any aggressive bullish bets ahead of any fresh Brexit updates from the UK PM Theresa May’s news conference in Sharm El-Sheikh later today at 13:00 GMT.
Meanwhile, May’s decision to push back a meaningful vote on the Brexit deal has upped the ante with parliament, which remains deeply divided over the country’s exit from the European Union. Hence, the key focus will be on May’s scheduled parliament statement tomorrow around 14:00 to 15:00 GMT.
In the meantime, today’s speech by the Fed Governor Richard Clarida might influence the USD price dynamics and produce some meaningful trading opportunities later during the North-American session amid absent relevant market moving economic releases.
Technical outlook
Yohay Elam, FXStreet’s own Analyst writes: “Resistance awaits at 1.13110, a high point last week and the highest since late January. 1.3160 is the next cap after holding cable down in late January. 1.3215 was a peak in mid-January and is the next cap.”
“Support awaits at 1.3045 which was a stepping stone on the way up late last week. 1.3010 was a swing low last week, and 1.2970 is where the 200 SMA meets last week temporary trough,” he added further.
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