GBP/USD tests weekly lows near 1.3070
- Cable fades the initial optimism and refocuses on the downside.
- GBP under scrutiny in light of upcoming crucial votes in HoC.
- US Non-farm Payrolls coming up next in the NA session.
The Sterling has reverted the initial uptick and is now forcing GBP/USD to resume the leg lower and flirt with weekly lows in the 1.3070/65 band.
GBP/USD looks to NFP, Brexit
Cable is down for the third straight session today amidst a stronger recovery in the greenback and lack of fresh headlines on the Bredit front.
Speaking about the devil, PM Theresa May faces crucial hours while she keeps negotiating her deal with EU officials, where the Irish backstop remain the key issue, all ahead of next week’s key votes in the House of Commons.
Moving forward, the US Non-farm Payrolls are next on the US docket, with consensus expecting the economy to have added around 180K jobs during last month.
What to look for around GBP
The British Pound is expected to remain under the microscope in the next days in light of crucial votes in March 12/13/14. In this regard, a solution (or anything close) to the Irish backstop remains elusive while PM May is expected to continue the talks on the matter over the weekend. So far, a second referendum has been almost ruled out, while a ‘no deal’ outcome remains well on the table (particularly after recent comments by L.Fox) and an extension of Article 50 hinges on a potential vote next week. On the broader picture, PM May made clear her intentions to remain in office to deal with the domestic agenda in the next months, opening at the same time another potential source of political uncertainty.
GBP/USD levels to consider
As of writing, the pair is losing 0.07% at 1.3072 and a breach of 1.3053 (21-day SMA) would aim for 1.3001 (high Jan.30) and finally 1.2989 (200-day SMA). On the upside, the next hurdle aligns at 1.3180 (10-day SMA) seconded by 1.3217 (high Jan.25) and then 1.3350 (2019 high Feb.27).