Sterling traders will be keeping a close watch on proceedings in the House of Commons where MPs will be voting on 15 House of Lords amendments to the EU Withdrawal Bill. These amendments include requiring the UK to negotiate a customs union with the EU before passing the final bill and giving parliament more power of approval to the final EU Withdrawal Bill, both red lines for UK PM Theresa May.
Additionally, the British Pound also faces potential headwinds from both the FOMC on Wednesday and the ECB on Thursday. The Fed is fully expected to hike rates by 0.25% for the second time this year while ECB President Mario Draghi may lay out a timetable for ending quantitative easing in the single-bloc.
UK Industrial and Manufacturing Output Data Weaker than Expected
The latest UK industrial and manufacturing output data – both much weaker than expected – has put the British Pound on the back foot ahead of this week’s crucial events. GBP-USD gave up initial gains and fell back down to 1.33660 post-release and the near-term set-up remains negative with 1.33020 the next level of noted support. The pair are now trading below all three moving averages while the RSI indicator is pointing sharply lower.