GBP/USD Price Forecast – Brexit Proceedings Continues To Hold GBP Pressured in Bearish Territory

The GBPUSD pair has so far continued to see sharp declines and proceedings on Brexit talks play a major role in same. With neither side ready to give some leeway to the other current scenario hints at a higher possibility for a disorderly no-deal exit rather than either extension of article 50 deadline. Owing to EU’s stance on not backing away Irish backstop agreement and the agreement remaining the greatest issue for UK lawmakers, unless the upcoming parliament session is going to vote on moving forward with Second Brexit Referendum in hopes for cancellation of Brexit any attempt at delaying delay is meaningless. Regardless of the timeframe of exit, be it delayed or on already agreed deadline unless both parties come to an agreement aside from canceling the Brexit the only possible outcome is no-deal exit.

US Macro Data Eyes For Short Term Directional Cues

This combined with dovish tone displayed by ECB during their press conference post interest rate decision released yesterday resulted in sellers gaining control of price action in the broad market. While these factors influenced dovish price action in British Pound, US dollar received strong fundamental support from upbeat US macro data. These factors lead to GBPUSD pair seeing sharp dovish decline all the way towards the mid-1.30 handle in American market hours. Headlines hit the market in Pacific-Asian market hours which was a pre-released extract of  UK PM May’s speech scheduled to occur in Grimsby, northern England and the contents of extract seem to be a warning from PM May to EU stating that they will face disorderly Brexit unless they agree to changes in backstop agreement.

This is mostly in line with the scenario I have explained above weighing down GBP. As investors await directional cues from US macro data scheduled to release later tonight, the pair has taken rangebound price action slightly above overnight lows but well below 1.3100 handle. UK’s macro calendar remains silent suggesting that price action is likely to continue range bound ahead of US macro data update. US economic calendar will see the release of unemployment rate data, non-farm payroll data, building permit data and average hourly earnings index data updates. Unless there is a news report which hints at positive change in proceedings of Brexit or US macro data sees dovish outcome, the GBPUSD pair is likely to continue trading rangebound with bearish bias during today’s market hours and in near future ahead of upcoming UK parliament meeting.

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