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- Investors remain cautious ahead of Parliament's information and vote on Brexit in the face of uncertainty over the UK's departure from the EU.
- The immediately decreasing trend line and the 50-day SMA restrict the rise nearby, while the 200-day SMA becomes the crucial downside support to watch.
The pound sterling (GBP) trades at nearly 1.3060 against the US dollar (USD) before the opening of London on Friday. GBP / USD rallied at the start of the day but could not beat a resistance of 1.3070-75 as investors became cautious ahead of key events. Not only the economic data of the United Kingdom and the United States, but the Brexit Parliament vote will also entertain investors during the day.
While GfK's monthly UK survey of consumer confidence provided initial support for the cable, with a figure of over -14 expected at -13, speculation that the Brexit app still appears on the map allowed the quote to extend its recovery after. However, investors became skeptical before key events such as the fourth quarter gross domestic product (GDP) (Q4) and the Parliament vote on Brexit. Not to mention that the US also has second-level data such as personal income, expenses, new home sales and the Chicago Purchasing Managers Index (PMI) to publish.
The yield on 10-year US Treasury bonds fell from 2.35% to 2.40%, its lowest level in 15 months, but remains the second lowest of the week.
UK GDP for the fourth quarter of 2018 is less likely to deviate from the original forecast by 0.2%, while personal income and spending in the US could show growth of 0.3 % for both personal income and expenses during the month of February. In addition, Chicago's PMI index could fall to 61.0 from 64.7 in March, while new home sales are expected to post a +0.620 million market consensus in February, up from +0.607 million previously. .
In the case of Brexit, the Democratic Unionist Party (DUP) has already announced that it will vote against the British Prime Minister Theresa May's proposal for Brexit around 14:30 GMT. In addition, some influential lawmakers such as Jacob Rees-Mogg and party rebels are also likely to join the opposition to give a new humiliating defeat to Prime Minister May. However, the market's attention could turn to the chances of a soft Brexit, given the May defeat, could help Parliament to ask the EU to extend the Brexit deadline by one year.
GBP / USD Technical Analysis
If a two-day downtrend is likely to be the immediate bullish barrier for the GBP / USD around 1.3070 / 75, the 50-day single-moving average (SMA) level of 1.3090 may be a relatively strong resistance. strong to disappointed buyers. If the optimists were to exceed 1.3090, a rising support line transformed into resistance since January 3, at 1.3110, seems essential.
At the same time, an ADM level of 1.3000 and 200 days out of 1.2980 could attempt to limit declines close to the quote; Failure to do so may cause the bears to aim for a 100-day SMA level of 1.2925.
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