- GBP/USD trades near 1.2970 during the early Asian session on Monday.
- The pair tests three-week low as the UK rejected several EU Brexit offers and increased uncertainty ahead of key week concerning parliamentary voting.
- 1.2950 can act as near-term strong support while 1.3000 may restrict immediate upside.
The British Pound (GBP) drops to 1.2970 versus the US Dollar (USD) at the start of Asian trading on Monday. In spite of likely Brexit delay, no clear Brexit deal after long negotiations between the UK and the EU leaders ahead of the key week when the British parliament is to vote on various Brexit aspects dragged the GBP/USD pair to a three-week low. Investors will closely observe the UK parliamentary voting beginning 12th March in order to determine near-term trade direction.
GBP/USD slid beneath 1.3000 as the UK rejected several EU Brexit offers before the British parliament votes on new Brexit proposal on this Tuesday. Notable among the EU offers was the UK’s exit without giving any leeway to the Irish backstop.
The CNBC reported that British foreign minister Jeremy Hunt said on Sunday that Brexit could be reversed if lawmakers reject the government's exit deal. Not only another referendum but challenges to the PM Theresa May’s position were also on the rise that added further weakness into the GBP. The Sunday Times also wrote that senior Brexiteers had warned the PM's team that she should offer to go by June. The news report further said some among the hard opposition party members has warned May that she would only get her deal through if she quit, leaving the path open for another PM to lead the next set of negotiations on the future trading relationship.
On Tuesday, March 12, the British members of parliament (MPs) will vote for the PM May’s latest Brexit proposal negotiated with the EU. If the proposal gets rejected, as it is most likely, it would open the door for voting on “no deal exit” on March 13. If MPs reject leaving the EU without any deal, they have to vote on the delay of Brexit deadline/Article 50 from 29 March currently on March 14.
While uncertainty surrounding Brexit is dragging the GBP/USD down, investors might await the UK market open in order to support Bears.
GBP/USD Technical Analysis
The GBP/USD pair dropped beneath 200-day simple moving average (SMA) figure of 1.2990 but is yet to clear an upward sloping support-line connecting January – February lows, near 1.2950. A break of which can fetch the quote 100-day SMA level of 1.2880.
Alternatively, the pair needs to surpass 1.3000 round figure in order to challenge 1.3080 and 1.3110 resistance levels.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD stays directed toward 0.6700 after strong Aussie data, weak China's PMI
AUD/USD holds higher ground toward 0.6700 in Asian trading on Wednesday. The pair finds fresh bullish impetus after the Australian Retail Sales data beat estimates with 0.6% YoY in May. Weak China's Caixin Services PMI data fails to deter Aussie buyers. Eyes turn to US data and Fed Minutes.
USD/JPY extends gains above 161.50 ahead of US data, Fed Minutes
USD/JPY trades on a stronger note above 161.50 after reaching a new high for this move near 161.75 during the early Asian trading hours on Wednesday. Market players remain focused on the possible Japanese FX intervention, which could cap the pair’s upside. US data and Fed Minutes awaited.
Gold price remains confined in a range below 50-day SMA, FOMC minutes in focus
Gold price continues with its struggle to gain any meaningful traction on Wednesday. Traders seem reluctant and prefer to wait for more cues about the Fed’s rate-cut path. Investors look to FOMC minutes for some impetus ahead of the NFP report on Friday.
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Meme coin generation platform Pump.fun outperformed the Ethereum blockchain in daily revenue on Tuesday after raking in $1.99 million. Following this achievement, a celebrity meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
Benefit of the doubt: US consumer confidence and elections
Despite widespread expectation for the US economy to be in recession in 2024, that fate has been avoided thanks to a resilient consumer. Yet it is difficult to square this undaunted spending with consumer confidence and sentiment readings that are lackluster at best.