GBP/USD Daily Price Forecast – GBP/USD below 1.31 Handle on Upbeat US Greenback Ahead of US GDP

The GBPUSD pair on Thursday moved over momentum inspired from Brexit headlines and US Greenback’s strength due to silent macro calendar on UK market. Pound longs finally gave up to dollar’s strength, and the GBP/USD pair broke below the 1.3100 level. The GBP/USD pair hit an intra-day high of 1.3179 following some encouraging Brexit-related comments, as EU’s Chief Negotiator Barnier tweeted “The EU continues to work for an orderly Brexit and an ambitious future partnership with the UK that should include a close economic relationship,” although BOE’s chief economist Andy Haldane said that Brexit worries are up, with uncertainty following suit, amid the ongoing uncertainty. As of writing this article, the GBPUSD pair is trading at 1.3087 down by 0.22% on the day ahead of Friday’s London market session after Thursday’s slide from 1.3179 as the Greenback climbed across the board.

Brexit Headlines Continue to Remain as Main Interest of Sterling Investors

Negotiations on Brexit aren’t going nearly as swimmingly as many people were expecting only a few weeks ago, and UK Prime Minister Theresa May is continuing to struggle to find workable middle ground with European Union leaders in Brussels. On the home front, Eurosceptic members within PM May’s own ruling party are promising to vote down any agreement PM May manages to scrape together with EU leaders, while indications are suggesting that a majority of Britons would now prefer to remain within the Eurozone, and the EU’s lead Brexit negotiator Michel Barnier stating that he’s working on a new deal, but details continue to be light. On release front the US markets will see the release of core-PCE price index, the Fed’s favorite gauge of inflation. Meanwhile the UK market will see GDP and nationwide HPI data release.

The UK’s GDP reading is scheduled to release at 08:30 GMT, and the annualized GDP for 2018’s second quarter is expected to hold steady at 1.3%, while the q/q number is likewise expected to hold at 0.4% and Total Business investment within the UK is also forecast to remain at current rates, with the q/q reading expected to come in at 0.5% and the annualized Total Business Investment forecast at 0.8%. A bad reading could see the Sterling continuing to slide to cap the day off, though Brexit headlines will likely continue to drive sentiment for Pound traders. From technical perspective, the GBP/USD pair retreated sharply after failing to regain much ground beyond 1.3170, a major Fibonacci resistance and now trades below its 20 SMA, which lost its upward strength. Furthermore, technical indicators have entered negative territory heading into the Asian session with strong downward slopes anticipating some additional declines ahead, particularly on a break below 1.3055 the low established last Friday, with scope then to extend its decline to 1.2970 should dollar’s strength persists.