The greenback recovery picked-up pace during early NA session, with the GBP/USD pair dropping to fresh daily low before retracing few pips to currently trade around mid-1.2400s.
The pair stalled a tepid recovery witnessed during mid-European session and faced rejection near 1.2500 psychological mark in wake of comments from UK PM Theresa May’s spokesperson on Brexit legislation.
Moreover, disappointment from recent UK economic data, indicating that the economy might be losing momentum, continues to weigh on the British Pound and contributed towards restricting any swift recovery.
Adding to this, a broad based US Dollar recovery against the backdrop of Friday’s mixed jobs report further collaborated to the selling pressure around the major, amid empty US economic docket.
This week’s key focus would be on Wednesday’s House of Commons vote on the Article 50 bill, which would be looked upon for some immediate respite / fresh impetus for the pair’s near-term movement.
Valeria Bednarik, Chief Analyst at FXStreet notes, “Technically, the 1 hour chart shows that the pair is trading below a bearish 20 SMA, unable to advance beyond it despite multiple intraday attempts, whilst technical indicators are gaining downward strength below their mid-lines. In the 4 hours chart, the price is well below a bearish 20 SMA, whilst technical indicators consolidate near oversold territory with no certain directional strength. The low set on January 31st at 1.2411 is the level to break to confirm a steeper decline during the upcoming sessions.”
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