Pound has been sitting at the edge of the sword with EU and Britain deciding to extend the Brexit discussion by short term or not. The pair lost some pace after Michael Barnier reiterated that the Brexit withdrawal agreement will not be opened. Having said that, the sterling greenback pair now awaits the EU Summit where the 28 leaders are meeting at Brussels for an emergency summit dedicated to Brexit.
Earlier today as the UK market opened, the GDP numbers printed in 3 months to February growing at 0.2 percent, while yearly numbers picked up at 2.0 percent. The yearly industrial and manufacturing data also gained pace at 0.1 percent and 0.6 percent respectively while the trade balance deepened more in red at deficit of $14.11 billion. IMF’s downgrading of global growth to 3.3 percent by 20 basis points is the lowest since the 2009 financial crisis. The downside risks have been assigned to US China trade war and the ‘No-deal’ Brexit scenario. IMF cut its outlook for UK growth to 1.2 percent this year, down 0.3 point from January.
FOMC minutes are due later tonight to give further direction though the next round of interest rate decisions are due only on May 1 from FOMC and BoE on May 2.
Technically, the pair is making higher lows and lower highs - forming a kind of Symmetrical Triangle, as shown with blue and green trend lines. The range is getting narrowed from both the ends while the pair is currently trading close to the apex of triangle - further clarification over the future direction will depend upon either side breakout of triangle. The price action is currently trading around the 38.2 % Fibonacci retracement level at 1.3080, while momentum indicator RSI (14 day) is neutral at 47 mark.
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