GBP/USD Daily Price Forecast – GBP/USD Holds Steady above 1.31 despite US Greenback’s Recovery

The British pound rallied significantly during the trading session on Tuesday, breaking back above the 1.31 level after drifting lower. The pair is currently testing 1.3160 level which is slightly above the week’s earlier high around 1.315 handle on late Monday’s trading session which can be viewed as underlying demand around mentioned price levels. The pair currently at 1.3164 with 0.14% increase in value ahead of Wednesday’s London market session. The Sterling dipped to a low of 1.3070 on Tuesday, but managed to stage a rebound to bring the week into positive territory and if the momentum continues the GBP bulls are expected to target resistance around 1.3170/80 handle as trading session proceeds further this week. Wednesday’s calendar for the GBP/USD is on the thin side for both the Sterling and the Greenback, with BBA Mortgage Approvals at 08:30 GMT and CBI Distributive Trades Survey at 10:00 GMT, both low-tier indicators for the UK, while the most important figure for the upcoming US session will be monthly New Home Sales figures for June at 14:00 GMT, forecast to contract from 689 thousand to 670 thousand.

GBPUSD Steady

After months of tail-chasing and squabbling within the UK’s parliament, Prime Minister Theresa May has announced that she will be personally leading up negotiations with the European Union on securing trade agreements in preparation for Brexit, but with March 2019 fast approaching and little leg-work done on establishing a safe trade conduit between the UK and the EU, good tidings on the Brexit are having a muted effect, and the Sterling remains close to the bearish side as action keeps the pair restrained near the week’s opening prices. In a written statement to the Parliament, British Prime Minister Theresa May had mentioned that “DExEU (Department for Exiting the EU) will continue to lead on all of the government’s preparations for Brexit: domestic preparations in both a deal and a no deal scenario, all of the necessary legislation, and preparations for the negotiations to implement the detail of the Future Framework”.

On the release front yesterday,  the advanced PMI reading released by Markit showed that the activity in the manufacturing sector in the U.S. expanded at a faster than expected rate in July. However, further details of the report revealed that the Services PMI and Composite PMI figures both fell short of the market expectations. The initial market reaction to the mixed data dragged the US Dollar Index to a fresh daily low of 94.40. Investors are currently on lookout for updates from Trump-Juncker Talks which is expected to influence USD’s momentum as trading session moves forward this week. From technical stand point, the 4 hours chart shows that the pair met buyers in an approach to a mild bullish 20 SMA, but also that it holds below a bearish 200 EMA, while technical indicators turned sharply lower, now nearing their mid-lines, not enough to confirm a bearish extension but clearly indicating limited buying interest in near future trading sessions.