GBP/USD – British pound climbs as parliament eyes no-deal vote

GBP/USD continues to rally this week. In Wednesday’s North American session, the pair is trading at 1.3308, up 0.42% on the day. The streaking pound touched a high of 1.3350 earlier on Wednesday, its highest level since July. In economic news, U.S. data was mixed. Factory orders were up 0.1%, well off the forecast of 1.5%. Pending Home Sales sparkled with a gain of 4.6%, its highest gain in two years. The U.K. will release GfK Consumer Confidence, with the markets projecting a weak reading of -15 points. On Thursday, the U.S. releases Advance GDP and unemployment claims.

Prime Minister May’s dramatic announcement of another parliamentary vote on Brexit has galvanized the pound, which has climbed 2.0% this week. May said that parliament would vote on the government’s withdrawal agreement no later than March 12. If lawmakers reject 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. Investors are confident that this makes a no-deal scenario even more unlikely, which has resulted in sharp gains for the pound.

There were no surprises from Powell’s testimony before a senate committee on Tuesday, as Powell preached patience with regard to changes in interest rates. Powell stated that the Fed was in “no rush to make a judgment” and made reference to “conflicting signals in the economy”. The labor picture remains bright, with strong hiring and low unemployment. At the same time, consumer spending and housing data have been soft. The markets are expecting the Fed to remain on the sidelines in May and June, meaning that the first hike of 2019 will not come before the second half of the year.

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GBP/USD Fundamentals

Wednesday (February 27)

  • 8:30 US Goods Trade Balance. Estimate -74.1B. Actual -79.5B
  • 8:30 US Preliminary Wholesale Inventories. Estimate 0.4%. Actual 1.1%
  • 10:00 US Fed Chair Powell Testifies
  • 10:00 US Factory Orders. Estimate 1.5%. Actual 0.1%
  • 10:00 US Pending Home Sales. Estimate 0.7%. Actual 4.6%
  • 10:30 US Crude Oil Inventories. Estimate 2.8M. Actual -8.6M
  • 19:01 British GfK Consumer Confidence. Estimate -15

Thursday (February 28)

  • 8:30 US Advance GDP. Estimate 2.6%
  • 8:30 US Unemployment Claims. Estimate 221K
  • 20:15 US Fed Chair Powell Speaks

*All release times are EST

*Key events are in bold

GBP/USD for Wednesday, February 27, 2019

GBP/USD February 27 at 11:30 EST

Open: 1.3252 High: 1.3350 Low: 1.3233 Close: 1.3308

GBP/USD Technical

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

GBP/USD was flat in the Asian session. The pair posted considerable gains in the European session and is steady in North American trade

  • 1.3258 is providing support
  • 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.