- Doubts over the future Brexit proceedings weigh on the GBP/USD amid greenback’s safe haven demand.
- 50-day SMA can offer strong support while 1.3380 likely being crucial resistance.
GBP/USD drops to the intra-day low of 1.3176 while heading into London open on Wednesday. The Cable, as the pair is popularly known, recently dropped after markets favored the USD’s safe-haven appeal amid pessimism surrounding the global economy and the Brexit. The second-tier data from the US and the UK, coupled with Brexit proceedings at the UK parliament, will offer fresh impulse to traders.
The GBP/USD pair was initially trading flat as traders awaited directions after yesterday’s rise expectedly because of an influential Tory member of the UK parliament Jacob Rees-Mogg conveyed his support to the British PM Theresa May’s Brexit plan over twitter.
The US Dollar (USD) grabbed investor attention as the news reports started flooding rate-cut speculations for the RBA and the RBNZ while China’s industrial profits also dropped.
Traders now await UK CBI distributive realized trade survey results followed by the US January month trade balance figures from the economic calendar. While CBI may try luring the Cable buyers with 5% growth expectations against 0% earlier, likely drawdown in the US trade deficit to $-57.0 billion from $-59.8 billion could dim the upside.
On the Brexit front, House of Commons could vote over various indicative Brexit proposals after yesterday’s Letwin amendment raised prospects of the parliament taking control of the Brexit from the government. Speculations are also rising that the Theresa May’s third Brexit proposal will be voted but no clear signals are available as Tories insist majority support ahead of putting the proposal for vote thrice in nearly two months.
GBP/USD Technical Analysis
Sellers may take a break around 1.3140 ahead of highlighting 50-day simple moving average (SMA) near 1.3080. Though, 1.3000 and 200-day SMA could confine the pair’s further declines.
On the upside, 1.3240, 1.3280, 1.3310 and 1.3380 may gain buyers’ attention during the quote’s U-turn.c
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