GBP/USD – British pound jumps as parliament to vote (again) on Brexit

GBP/USD has posted considerable gains on Tuesday. In North American trade, the pair is trading at 1.3263, up 1.27% on the day. In economic news, BoE Governor Mark Carney testified at the quarterly inflation report hearings. In the U.S., construction numbers were mixed. CB Consumer Confidence sparkled, with a score of 131.4, well above expectations. As well, the Richmond Manufacturing Index jumped to 16 points, a 5-month gain. All eyes are on Fed Chair Jerome Powell, who is testifying before the Senate Banking Committee. On Wednesday, Powell speaks before the House Financial Services Committee.

With just over a month until Brexit Day, there is plenty of activity in London and Brussels. British Prime Minister May said on Monday that parliament would have the opportunity to vote on the government’s withdrawal agreement no later than March 12. If lawmakers shoot down that proposal, they will vote the next day on two separate proposals – one on a no-deal Brexit, and the second on requesting the EU to extend Article 50 and delay Brexit past March 29. May’s dramatic announcement is sure to trigger plenty of reaction in parliament, so traders should be prepared for volatility from the pound, ahead of next week’s drama in parliament.

The Federal Reserve is back in the spotlight this week, as Fed Chair Jerome Powell testifies before congressional committees on Tuesday and Wednesday. The Fed has been decidedly dovish early in 2019, in sharp contrast to 2018, when the Fed raised rates four times in order to keep the red-hot U.S. economy from overheating. However, the global trade war has taken a bite out of global growth, and the U.S. economy is unlikely to repeat last year’s performance. The markets will be listening closely for hints regarding future interest rate policy.

Markets consolidate as Trump tweets oil

Powell sticks to the script in his text release

GBP/USD Fundamentals

Tuesday (February 26)

  • 5:00 British Inflation Report Hearings
  • 8:30 US Building Permits. Estimate 1.29M. Actual 1.33M
  • 8:30 US Housing Starts. Estimate 1.25M. Actual 1.08M
  • 9:00 US HPI. Estimate 0.3%. Actual 0.3%
  • 9:00 US S&P/CS Composite-20 HPI. Estimate 4.5%. Actual 4.2%
  • 9:45 Fed Chair Powell Testifies
  • 10:00 US CB Consumer Confidence. Estimate 124.8. Actual 131.4
  • 10:00 US Richmond Manufacturing Index. Estimate 6. Actual 16

Wednesday (February 27)

  • 10:00 Fed Chair Powell Testifies
  • 19:01 British GfK Consumer Confidence. Estimate -15

*All release times are EST

*Key events are in bold

GBP/USD for Tuesday, February 26, 2019

GBP/USD February 26 at 11:10 EST

Open: 1.3096 High: 1.3269 Low: 1.3096 Close: 1.3263

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3070 1.3170 1.3258 1.3362 1.3460 1.3550

GBP/USD posted slight gains in the Asian and European sessions. The pair has recorded strong gains in North American trade

  • 1.3258 has switched to a support role after strong gains by GBP/USD on Tuesday
  • 1.3362 is the next resistance line
  • Current range: 1.3258 to 1.3362

Further levels in both directions:

  • Below: 1.3258, 1.3170, 1.3070 and 1.2910
  • Above: 1.3362, 1.3460 and 1.3350

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.