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• The latest leg of a sudden pickup lacked any catalyst and quickly ran out of steam.
• Persistent Brexit uncertainties continue to dent sentiment surrounding the GBP.
• A modest USD uptick further collaborated towards capping any meaningful up-move.
The GBP/USD pair faded a knee-jerk spike to levels beyond the 1.2800 handle and quickly retreated to the lower end of its daily trading range.
After consolidating in a range through the Asian/early European session, the pair picked up the pace in the last hour and jumped an intraday high level of 1.2810.
The up-move lacked any obvious catalyst but coincided with the news that the UK trade secretary Liam Fox has urged MPs to vote for Theresa May’s controversial EU withdrawal plan.
However, investors seemed convinced that the UK PM Theresa May will fail to get the Brexit deal past parliament, which eventually kept a lid on any runaway rally for the British Pound.
The pair has now retreated back to the 1.2780 region, the lower end of its daily trading range, and was further weighed down by a modest US Dollar uptick, which remained supported by Thursday’s FOMC meeting minutes.
The latest FOMC meeting minutes reaffirmed prospects for another rate hike in December and largely offset Wednesday’s dovish sounding comments by the Fed Chair Jerome Powell and eventually extended some support to the greenback.
In absence of any major market moving economic releases from the UK, the incoming Brexit-related headlines might continue to drive sentiment surrounding the British Pound and infuse some volatility around the major.
Later during the early North-American session, a scheduled speech by New York Fed President John Williams and the release of Chicago PMI might also help traders grab some short-term opportunities on the last trading day of the week.
Technical levels to watch
Immediate support is pegged near the 1.2760 zone and is followed by the 1.2725 level, below which the pair is likely to break through the 1.2700 handle retest yearly lows, around the 1.2665-60 region. On the flip side, any attempted move back above the 1.2800 handle now seems to confront resistance near the 1.2825 region, which is closely followed overnight swing highs, around mid-1.2800s.