GBP/USD Daily Price Forecast – GBP/USD Flat on Brexit Cues Around 1.29 Handle

The GBP/USD pair is holding steady just above the 1.2900 level ahead of Thursday’s London market session. Hopes for a soft-landing Brexit leapt forward yesterday as Germany and the UK both expressed a willingness to drop key requirements from their Brexit negotiations, and hopes of averting a messy exit are on the rise, dragging the Sterling from 1.2785 all the way to 1.2982, and the pair is now holding steady as traders head into the latter end of the week. But the pound is expected to fall nearly 8% to 15% in the immediate aftermath if Britain leaves the EU without a deal in March 2019 according to a median forecast while the latest Reuters poll of 50 foreign exchange specialists believe the Cable will rise 6% to $ 1.37 in a year on successful Brexit proceedings.

Investors Focus on US Macro Data as Momentum From Brexit Updates Seem To Be Slowing Down

The dollar sagged on Thursday, pressured by the pound which rose after fears of Britain leaving the European Union with no comprehensive agreement faded, although skittish emerging market currencies helped limit the greenback’s retreat. The dollar index against a basket of six major currencies DXY stood at 95.034, down 0.15% after shedding nearly 0.3% overnight when it was nudged away from a two-week high of 95.737. The British currency’s rise also helped the euro on its upward move in early Asian market hours on Thursday. The pound gained but its rise is likely to be temporary as a German government spokesman said yesterday that the government position on Brexit was unchanged and that the government has full trust in Barnier. Thursday is a thin showing for the Pound on the economic calendar, however yesterday’s UK Service PMI data had better than expected readings helping GBP on its uptrend movement.

Traders will now be looking towards the upcoming US session, where Initial Jobless Claims is scheduled to release at 12:30 GMT and is forecast at 214 thousand while last reading was at 213 thousand and Markit PMI’s for August is scheduled to release at 13:45 GMT with no change in forecast and these updates will be dominating the market due to a lack of top-tier data on the docket. The Sterling-Dollar chart appears to be hung up in the middle with yesterday’s bullish pop failing to spur significant momentum. Technical indicators in the 4 hour chart entered positive ground but lost upward strength, indicating decreasing buying interest. The risk toward the downside will increase on a clear break below the mentioned 1.2890 support. Expected support and resistance for the pair are at 1.2870, 1.2845, 1.2800 and 1.2930, 1.2980, 1.3010 respectively.