GBP/USD: Another bounce off 200-day SMA despite looming Brexit uncertainty
- The UK PM May’s inability to get political support, be it at home or at the EU, continues to hurt the trading sentiment.
- Repeated U-turns from 200-day SMA highlights the importance of near-term resistance.
The GBP/USD pair is mildly bid around 1.3035 during early Monday. The pair took another U-turn from 200-day simple moving average (SMA) despite not so positive Brexit headlines. Market participants are more likely to focus on the Brexit developments amid the absence of major data.
The UK Prime Minister Theresa May’s alliance with the opposition Labour party to break the Brexit deadlock gave little positive signs to the British Pound (GBP) traders as both the sides continue to jostle around key issues of the Brexit deal, as expected. This joins upbeat NFP print from the US and dragged GBP/USD down on Friday.
Meanwhile, PM May’s request for another Brexit extension had mixed response as some of the EU lawmakers are ready to allow a year-long time to the UK after April 12 whereas politicians at home criticize the same.
Adding to the uncertainty is the news from The Guardian's Brussels Bureau Chief Daniel Boffey. The news report mentions that France, Spain and Belgium put forward no deal Brexit at the EU27 ambassadors' meeting on Friday as they saw nothing in PM May’s request letter for Brexit extension.
During the weekend, the UK PM May has now started pushing the British lawmakers to support her deal in order to avail Brexit or remain in the region.
Looking forward, Brexit headlines are likely to remain in the spotlight whereas the US factory orders for February month may offer intermediate moves amid lack of data. The order growth could disappoint greenback lovers if matching -0.6% forecast versus +0.1% earlier increase.
GBP/USD Technical Analysis
200-day SMA level of 1.2980 continues to act as strong downside support for the pair, a break of which can drag the quote to 100-day SMA level of 1.2930 ahead of pushing bears toward 1.2900 round-figure.
On the upside, 1.3100 round-figure surrounding 50-day SMA, followed by 1.3155 and four-week-old descending trend-line at 1.3200, seem important resistances to watch.