GBP/USD Daily Price Forecast – Sluggish and Rangebound Pattern

GBP/USD Pair gained strength on a two-week Brextension. Pair strongly consolidating and providing no clear direction.
Nikhil Khandelwal
British pounds banknotes background

The Cable opened on Friday morning without many fluctuations, and it keeps moving around 1.3140 levels. The Pair underwent slight dip by about 08:15 GMT. The primary reason for this fall due to the increased selling pressure in the EUR currency following the release of a weaker March Manufacturing Purchasing Managers Index (PMI) of Eurozone, Germany, and France. This announcement helped to have positive gains on USD Index which computes the greenback against the six major currencies including Euro.

Brextension

By 09:15 GMT, the pair uplifted recovering the morning losses after the European Leaders affirmed to give an extension to the Brexit deadline so that the UK Prime Minister Theresa May speed ups in finalizing on how to exit the European Union. This action had been taken by the EU leaders to make sure there happens a deal Brexit. There is still an underlying fear in the Investor sentiment thinking that two weeks might be insufficient for May to wrap up the Brexit with a good deal favoring both the parties.

Theresa May will try to get majority support for a deal Brexit from the Parliament this time, if she succeeds then well and good. The EU leaders would be able to give their full focus on the upcoming EU elections. The catch here remains that if she could not make things work before April 12, new paths need to be formulated then. This could elevate the odds for a Hard Brexit. It might lead to the rise of GBP bears depending upon the updates from the Brexit front by the end of this two-week extension provided.      

Technical Overview

The GBP/USD pair lacked a clear direction since Friday’s morning. From the technical front of GBP/USD, it can be noted that the pair tried to slightly outbreak the Bollinger Band (BB) for a short period. The pair could not wholly escape the BB, and later it reverted its direction staying within the band range.

There’s a very high possibility that the cable will keep this characteristic and there won’t be any significant movement on either side for Friday’s trading session. The RSI levels also sustained in the range of 30.6 and 72.72 which reveals that there is no strength to either the selling side or the buying side.  

GBPUSD 5 Min 22 March 2019At the time of writing this article ( 14:17 GMT), the GBP/USD was trading at around 1.3187 level.       

 

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