• The incoming Brexit headlines influencing price-action on Thursday.
• Subdued USD demand extends support and helps limit downside.
• Today’s second-tier US data unlikely to provide the required momentum.
The GBP/USD pair reversed an early European session slide to sub-1.3500 level and now seems to have stabilized near the 1.3530-35 band.
The pair had a good two-way move on Thursday and was influenced by the incoming Brexit headlines. Report that the UK is ready to stay in the customs union beyond 2021 initially helped the pair to build on overnight rebound from a two-week-old trading range support.
The up-move ran out of steam near the very important 200-day SMA after the UK PM office dismissed the report and the UK PM Theresa May reaffirmed the same by saying that the UK will be leaving the customs union.
Meanwhile, a subdued US Dollar demand, despite the prevailing positive tone around the US Treasury bond yields, helped limit further downslide, with the pair quickly bouncing back around 40-pips.
There isn’t any major market-moving data due from the UK and the US economic docket also features a couple of second-tier data, which again seems unlikely to provide the required momentum to assist the pair breakthrough its near-term trading range.
Technical levels to watch
The 1.3555-60 region (200-DMA) might continue to act as an immediate resistance, above which the pair is likely to head back towards challenging the trading range resistance near the 1.3600-1.3610 zone.
On the flip side, the 1.3500 handle might continue to protect the immediate downside, which if broken could drag the pair back towards a key support near mid-1.3400s.