GBP/USD Daily Forecast – All Eyes on Weekend Vote

GBP/USD has seen an incredible surge higher over the last week or so. Where the pair goes from here largely depends on how UK parliament votes on the latest Brexit Deal.
Jignesh Davda
GBP/USD

PM Johnson Notches a Victory

UK Prime Minister Boris Johnson finally got a win as he managed to get EU officials to agree to his proposed Brexit deal. But Johnson now faces a bigger challenge in getting the deal ratified in parliament.

As the three main opposition parties have pledged to vote down the new deal, and since Johnson has lost his majority, the vote could go either way.

Parliament has scheduled a special meeting on Saturday to decide on how to proceed from here. The meeting will start at 08:30 GMT and it is expected to be a close vote.

Whichever way parliament decides on, a volatile price swing is expected when the market reopens next week. Considering that liquidity is usually thin at the open, there will likely be a big gap in the pound to dollar currency pair.

In yesterday’s forecast, I made a case that thought he pair could rally towards 1.2924 resistance, but some profit-taking is likely to take place. I still support this theory as the risk of holding exposure over the weekend is quite large and I do think traders will look to square up before the day ends.

The only thing that can alter that view is if there is some news later today that strongly supports the idea that Johnson has secured the vote. Johnson will be trying to convince Labour Party rebels to vote his way but so far there has not been any reason to confidently say he has enough votes.

Technical Analysis

For the past few days, I’ve been looking at a horizontal resistance level at 1.2942. Yesterday, GBP/USD reached it, and while overshooting it a bit, the level held it lower on an hourly basis.

GBPUSD Hourly Chart

My expectation is that we may see a bit of a pull back at this point. Again, I’m basing this on the fact that I don’t think traders will want to take on the risk of holding Sterling long over the weekend.

Bottom Line

  • Sterling might struggle to extend higher unless there is news that Johnson has secured the vote.
  • Resistance at 1.2924 is in play. The pair might correct from here as traders look to square positions ahead of the weekend.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US