GBP/USD Trades Sideways on Brexit Jitters and US Data

The GBP/USD currency pair today traded in a sideways range during the early European session given the empty UK economic docket. Much of the currency pair’s movement was in reaction to news concerning Brexit negotiations and yesterday’s US macro data.

The GBP/USD currency pair was trading in a tight 36-point range establishing support at 1.3412 and a high at 1.3448 below the crucial 1.3450 resistance level.

The currency pair spent the early part of the European session unable to break above the crucial 1.3450 level as Brexit jitters weighed on the pound. UK news reports earlier today indicated that British PM Theresa May was planning to accept the EU plan to postpone real trade talks until March. Further Comments regarding the Brexit talks from German Chancellor, Angela Merkel, also weighed heavily on the pound. The pound was still reeling from the sell-off occasioned by yesterday’s Bank of England monetary policy statement.

The Cable could have traded much lower if it were not for the greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 93.46. The US dollar was further supported by yesterday’s upbeat advance retail sales data released by the Census Bureau. The currency pair’s current performance was significantly influenced by yesterday’s US and UK data.

Given the empty UK docket, the currency pair’s short-term performance is likely to be influenced by the release of the US Empire Manufacturing and industrial production data.

The GBP/USD currency pair was trading at 1.3423 as at 10:25 GMT having declined from a daily high of 1.3448. The GBP/JPY currency pair was trading at 150.56 having dropped from a high of 151.02.

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