GBP/USD comes under pressure near 1.3030, session lows
- Cable eases from daily highs in the vicinity of 1.3080.
- Brexit optimism lifted the pair to fresh 2-week peaks.
- PM May expected to meet EU Juncker later in the day.
After clinching fresh multi-day highs in the 1.3075/80 band, fresh selling impetus has now dragged GBP/USD to daily lows in the vicinity of 1.3030.
GBP/USD focused on May’s trip to Brussels
Following three consecutive daily advances, Cable is now facing some downside pressure while cautiousness among market participants remains on the rise in light of today’s meeting between UK PM Theresa May and EU J.C.Juncker.
In fact, and with the Irish backstop on top of the agenda, PM May is expected to put forward some improved legal proposals aimed to gather some support for her Brexit plan.
In the UK data space, the CBI Industrial Trends Orders for the current month are due later. Across the ocean, the FOMC minutes should grab all the attention with the main focus on the balance sheet reduction and potential revision of the ‘dots plot’.
What to look for around GBP
The Sterling is expected to remain under increasing pressure as the clock continues to tick and there is no progress on the horizon (or even any hint of it) in the UK-EU divorce negotiations. So far, consensus among market participants seems to lean to an extension of Article 50 or a deal at the very last minute. In this regard, the Irish backstop will be the main topic at today’s meeting between May and Juncker in Brussels. This, in combination with soft inflation figures as of late and prospects of extra deterioration in UK fundamentals should be enough to keep occasional rallies in GBP somewhat capped.
GBP/USD levels to consider
As of writing, the pair is losing 0.18% at 1.3038 and a breach of 1.3003 (200-day SMA) would pave the way for a visit to 1.2879 (100-day SMA) and finally 1.2772 (low Feb.14). On the upside, the next hurdle aligns at 1.3076 (high Feb.20) followed by 1.3174 (monthly high Nov.7 2018) and then 1.3215 (2019 high Jan.25).