Yesterday, the British pound fell sharply, given that neither party was able to successfully approve its amendments. Labor Party’s amendments to expand Article 50 and attempts to stop the Brexit scenario without a deal failed, while the Prime Minister’s proposal for Plan B is likely to be approved only if it manages to agree with the EU and replace the Irish border offer agreement with another.
Meanwhile, the EU has clearly stated that they are not ready for further negotiations on the Irish agreement, which put the Prime Minister in a difficult position. However, the downward movement was limited, as investors are now waiting for the next parliamentary meeting on February 13, 2019, when PM May promised to conclude a revised deal if she can get it from the EU.
GBP/USD Technical Analysis
The British Pound gained traction recently and traded above the 1.3180 resistance level against the US Dollar. The GBP/USD pair even climbed above the 1.3200 barrier and later started a downside correction.
The pair traded below the 1.3150 support and the 50 hourly simple moving average. It also broke the 1.3120 support and a declining channel on the hourly chart. A low was formed at 1.3056 and later the pair corrected higher.
However, there are many hurdles on the upside near the 1.3100 level and the 38.2% Fib retracement level of the recent decline from the 1.3199 high to 1.3056 low.
Therefore, it won’t be easy for buyers to push the pair back above the 1.3100 and 1.3110 levels in the short term. On the downside, initial support is at 1.3060, below which the pair may revisit 1.3020.