Market Overview

Prospects Of Delayed Brexit Settle Sterling In 1.3000-1.3100 Range

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  • The GBP/USD is trading little changed on the downside around 1.3020 as the last minute progress on Irish border backstop agreed at May-Juncker meeting failed to boost Sterling further.
  • The UK domestic politics saw members of parliament leaving the main political parties as both Labor and Conservative party saw people leaving to join the Independent group. 
  • The UK Prime Minister Theresa May is possibly facing another Brexit agreement vote next week in House of Commons but must exhibit some progress on the backstop to keep thing move forward.
  • A 200-day moving average (DMA) of 1.2995 is serving as strong support for GBP/USD.

The GBP/USD is trading little changed on the upside at around 1.3020 after rising as high as 1.3096 on hopes for delayed Brexit after the UK Prime Minister Theresa May and the European Commission President Jaen-Claude Juncker agreed to modify the troubled Irish border backstop in the withdrawal agreement.

The UK has no Brexit deal yet, it could possibly agree one by end-March. The EU already said it would claim that members of the UK parliament vote on backstop change first before the European Council summit due in March 20-21 confirms the deal.

Technically the GBP/USD broke away from the downward sloping trend that saw the currency pair fall as low as 1.2770 last week and now it is range bound trading within 1.3000-1.3100. With the GBP/USD trading at around 1.3020, just above a 200-day moving average (DMA) of 1.2995, further move on the upside is limited by 1.3100. The support is at around 1.3030 and a 200-DMA at 1.2995.

After the week of trading above the 1.3000 level, the Slow Stochastics moved all the way up from the Oversold to the Overbought territory, ready to make a bearish crossover. The reversal of the Relative Strength Index to the upside is also losing steam.

GBP/USD daily chart

gbp_usd_daily-636864260067165458.png

Posted-In: BrexitGovernment News Eurozone Forex Global Markets General

 

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