GBP/USD Daily Price Forecast – GBP/USD Holds Steady at 1.31 Handle despite Steep Fall in Price Movement

The GBPUSD pair which traded uptrend in early trading hours of Thursday, took to steep decline in North American session as Dollar gained strength in later half on Thursday over multiple factors such as Chinese Yuan’s weakness, rise in 10 year US Treasury Note Yields and ECB’s Draghi’s comment over interest rate decisions each of which served as key triggers for dollar’s recovery. The pair fell nearly 100 pips from intra-day high of 1.32006 to low of 1.31040 on Thursday’s North American market hours. However Sterling stabilized around 1.31149 to 1.31008 handle during early Asian market hours and has been trading flat since then. The GBPUSD pair is currently at 1.3110 with 0.01% increase in value as the pair heads into Friday’s major market window.

GBPUSD Holds On

The G10 FX space went USD-positive across the board for Thursday, fueled by decision of European Central Bank (ECB) head Mario Draghi who clarified to traders that the ECB will not be moving on interest rates until at least September 2019 and the QE easing program would stay on course to end the 2.6 trillion euro stimulus programme this year as the ECB hopes to weather a storm of lagging economic growth. The ECB’s statement fueled a rebound in the Greenback as traders fell back into the US Dollar for lack of better options. Adding fuel to the Sterling’s sell-off fire was the European Union’s head Brexit negotiator Michel Barnier, who officially killed off UK Prime Minister Theresa May’s latest ‘third option’ Brexit proposal.

The UK now heads back to the drawing broad against a backdrop of uncertainty as the final cut-off date for Brexit March of 2019, is fast approaching and little if any headway has been made on averting a hard-landing Brexit scenario, progress is expected in the coming months now that PM May has formally taken over the reigns as head Brexit negotiator for the UK, as UK’s Brexit cabinet is focusing to create backup plans to help soften the landing if a hard exit scenario becomes unavoidable. Friday offers nothing on the GBP side of the economic calendar, and traders will be focusing on the US preliminary GDP figures due at 12:30 GMT, and the headliner annualized GDP for Q2 is forecast to clock in at 4.1%, versus the previous reading of 2.0%.The Sterling-Dollar pairing is looking at further downside on the technical front. Expected support and resistance for the pair are at 1.3090, 1.3045, 1.3010 and 1.3145, 1.3190, 1.3230 respectively.