GBP/USD: Little changed near 1.3050 amid lack of fresh catalysts

Forex Distribution
  • Trades kept giving importance to the overall greenback strength amid thin data.
  • The Brexit issues and the US data will be in the spotlight.

The British Pound (GBP) is tightly hugging 1.3050 figure versus the US Dollar (USD) during early Asian sessions on Friday. Even after being on a negative side due to Brexit uncertainty and overall strength of the US Dollar, the GBP/USD pair has recently been silent due to lack of fresh news/updates. In addition to Brexit developments, the US Michigan consumer sentiment index will also be observed for further direction.

On Thursday, the European Union (EU) allowed the UK to remain in the region for a bit longer till October 31 than the earlier scheduled April 12 Brexit date. The regional board also left open the door for the UK to participate in the EU election of May month together with allowing earlier exit in case Britain signs withdrawal agreement. 

However, the UK Prime Minister Theresa May wasn’t welcomed at home in spite of such an effort as opposition Labour party still stands tall to challenge her plans in the cross-party Brexit talks. PM May said in her statement to the parliament that it’s tough to reach a Brexit agreement with the opposition. Though, the EU has clearly shown its interest in no change in further extension and no re-opening of the Brexit deal.

While political pessimism was one reason the Pound dropped, the strength of the greenback was another one in the boat. Global traders took advantage of the better than forecast producer price index and a 50-year low of the US initial jobless claims.

Traders may follow the April month Michigan consumer sentiment index figure, expected 98.0 from 98.4, on the economic calendar whereas Easter recess in the UK parliament might curb the official flow of news reports until April 23. 

However, it doesn’t mean that the British politicians will keep mum about the Brexit. As per the Guardian report, the PM May has already urged members of the parliaments (MPs) to use their Easter recess to consider their national duty to resolve Brexit crisis. Recently, Times reports that the UK Conservative MP Boris Johnson held private talks with DUP leaders whereas the opposition Labour party leader Jeremy Corbyn has already met Irish PM earlier during the meet.

GBP/USD Technical Analysis

50-day simple moving average (SMA) figure of 1.3090, recent highs near 1.3125 and a month-long descending trend-line near 1.3150 can limit near-term upside ahead of highlighting 1.3200 resistance.

On the downside, 1.3000, 200-day SMA level of 1.2975 and 100-day SMA level of 1.2940 could offer nearby strong support.

Original article written by Anil Panchal at FX Street