GBP/USD Daily Price Forecast – GBP/USD Tests 1.30 Handle Amid Brexit Woes & Thin Macro Calendar Schedule in UKThe pair continues to be under pressure but has been able to hold on to the 1.30 region over the last couple of days
The GBP/USD is continuing to struggle near 1.3080 as the new trading week sees the Sterling on the softer side amidst rising fears of a hard Brexit and disappointing economic data for the UK that casts doubt on an expected Bank of England (BoE) rate hike in August. The latest Brexit proposal, crafted by Prime Minister Theresa May and hotly debated within the UK’s parliament, is dead in the water after a flat rejection by the European Union, and Brexiteers in London are back to the drawing board on how to avert a hard Brexit scenario, with the new Brexit minister accusing Europe of stonewalling the negotiation process in hopes of forcing the UK to “blink”. PM May has also shot down suggestions of another Brexit referendum as the sides continue to remain at loggerheads on how the UK is to leave the union, with hard-line leavers seeking massive exemptions and special circumstances from the European Union, with EU leaders in Brussels unmoved by the UK’s current negotiating strategy.
The pair has been trading well beneath 1.3100 heading into Tuesday’s London market session as the major pair continues the current trend of slumping into fresh lows. The Sterling has closed lower against the Greenback for three straight months, and is currently on pace to make it a fourth with July leaning into the bearish side. Tuesday’s economic calendar for the GBP/USD is a weak showing, with the only GBP-focused release being the low-tier CBI Industrial Trends Survey, coming in at 10:00 GMT, and the m/m survey for July is expected to contract from 13 to 10, a bearish showing for executive’s opinions on forward-looking output expectations. The upcoming US session will also be the m/m May Housing Price Index at 13:00 GMT, forecast to tick up from 0.1% to 0.4%, while the preliminary Markit Composite PMI for July, due at 13:45 GMT, is expected to shift down from 56.2 to 56.0 post which traders are looking for a healthy dose of volatility to spur the Sterling-Dollar pair into action.
It’s quickly becoming move-or-get-off-the-pot time for Sterling bulls, and buyers are either going to have to make a push for the 1.3200 major handle, or allow the Sterling to fall into fresh yearly lows. When looking at the technical picture, a convincing break back below the 1.30 handle might now turn the pair vulnerable to resume with its prior depreciating slide and aim towards testing the 1.2900 round figure mark. On the flip side, momentum back above 1.3110-15 area could assist the pair to make a fresh attempt towards clearing an important hurdle near mid-1.3100s. A decisive break through the mentioned barrier now seems to pave the way for an extension of the recovery move further towards reclaiming the 1.3200 handle.