GBP/USD Price Forecast – GBP/USD Rangebound Near Previous Session Highs
Hopes for Brexit underpin GBP bulls but caution ahead of Brexit vote and influence from upbeat USD cap further gains resulting in rangebound price action.The GBP/USD pair yesterday opened on a subdued note for the week but steadily gained positive momentum in the broad market across yesterday’s trading session. There were two main factors that led to yesterday’s positive price action. The first factor was USD’s weakness stemming from the lingering influence of Friday’s mixed macro data outcome and the second factor which can also be considered as the major reason for positive price run – hopes for critical Brexit decisions. As Brexit deadline approaches closer with each passing day, UK lawmakers have very little time to address critical issues and make key decisions. With the last two parliament sessions seeing lawmakers hesitant on making a critical decision, investors expect today’s house of commons session to vote on PM May’s Brexit deal.
Hope For Brexit Continues to Underpin GBP Bulls
Given the fact that recent talks between EU & UK representatives ended on a stalemate and UK lawmakers have rejected amendments and deals suggested by EU in current Brexit agreement, there is no point in delaying critical vote any further. This has boosted market hopes that today’s session will see the UK MP’s decide on and take actions to delay Brexit deadline and push for Second Brexit Amendment. Hopes for progress on critical Brexit decisions ahead of upcoming parliament meeting helped GBP bulls gain solid momentum yesterday and move back above 1.32 handle and maintain a solid rally above said price level during Asian and European market hours ahead of UK parliament vote. However, yesterday’s positive US retail sales data capped gains resulting in rangebound price action.
As of writing this article, the GBP/USD pair is trading at 1.3209 up by 0.97% on the day. Moving forward, investors are on the lookout for highly active economic calendar updates from both sides of Atlantic for short term trading opportunities ahead of UK Parliament Brexit vote later in the day. On the release front, UK economic calendar will see the release of GDP data, Monthly GDP 3M/3M change, Trade balance update and Manufacturing production data while the US calendar will see the release of Core CPI data and speech by FOMC member Brainard. A better than expected UK macro data will help GBP bulls resume yesterday’s positive price action and aim for the mid-1.32 handle ahead of UK Parliament Brexit vote. Expected support and resistance for the pair are at 1.3200, 1.3180, 1.3150 and 1.3233, 1.3250, 1.3265 respectively.
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