GBP/USD Daily Price Forecast – Sterling Investors Focus on Brexit Headlines Owing to Lack of Macro Data Updates

The Pound shed another 100 pips against the greenback yesterday moving down to 1.2866 on the day but closed for the day above 1.2880, a major static support level that was last seen early September. There was no particular catalyst behind the daily slump, but persistent uncertainty about Brexit, as the optimism over a new customs proposal faded as quickly as it came. Concerns rose after a government watchdog said that Britain will “pay the price” of a no-deal Brexit, as new borders control may not be ready in time. Also, concerns that the transition period could be extended for several years, becoming a process subject to annual reviews, weighed on the Pound. As of writing this article, the GBPUSD pair is trading at 1.2908 up 0.20% on the day.

UK Firms Start Preparing For Hard Exit As No-Deal Brexit Looks Likely

On release front, schedule is completely clear of UK data on the economic calendar, and traders will have no choice but to continue focusing on Brexit headlines, which have taken a turn for the bearish recently. The selling pressure remained unabated after the UK PM Theresa May’s spokesman said that the PM had been clear that she didn’t want to enter into an indefinite post-Brexit transition period. Further collaborating to the overnight slump was a stronger US Dollar, which was also seen benefiting from the global flight to safety triggered by a fresh wave of a selloff in the US equity markets. As the clock winds down with both sides remaining at loggerheads, the UK’s population and firms are beginning to batten down the hatches for a hard-style, no-deal Brexit, and concerns are on the rise that the UK will have difficulties getting essential supplies and resources into Britain’s borders following a messy European exit.

In the last 24 hours the GBPUSD pair took another step lower as Brexit concerns continue to grip the Cable, squeezing trader confidence out of the Pound and taking the pair down past the 1.2900 technical level. The downside remains a high risk as broader markets continue to chew on risk-off events globally, but a sharp rebound could see intraday buyers piling into a correction early. Looking from technical perspective, the pair’s inability to stage any meaningful recovery adds credence to the negative outlook and the downfall seems more likely to get extended further towards testing the 1.2800 round figure mark with some intermediate support near the 1.2850-45 regions. On the flip side, any meaningful recovery back above mid-1.2900’s will see a bout of short-covering could lift the pair back towards the 1.2975-80 supply zone en-route the 1.30 handle.