GBP/USD Price Forecast – Brexit Woes On Indecisive UK Lawmakers Keeps Sterling Under Pressure

The GBPUSD pair continues to remain under strong selling pressure since the trading session started for the week. The pair yesterday saw sharp two-way price action on Brexit headlines driven price action. Early in the day, the pair rose over 50-pips on news that DUP decided to abstain from voting on Customs Union 2.0 amendment. Customs Union 2.0 was designed keeping Norway’s deal with EU in mind which could lead to a softer Brexit. With DUP out of the picture, there was hope for either the Labour party or UK Tory party to gain a majority which could help delay Brexit for a while.

Macro Data Updates Eyed For Short Term Profit Opportunities

However, the UK parliament session lawmakers failed to come to an agreement on indicative votes for all 4 proposals submitted ending the session in a stalemate scenario. This caused the pair to lose all early gains and drop over 60 pips from intra-day highs. With less than 11 days left for UK’s Brexit deadline, unless lawmakers come to an agreement on how to move forward, UK will see a hard Brexit outcome. Headlines now suggest that some lawmakers are aiming to push PM May’s deal to be approved while others are pushing for second Brexit referendum and general election in the UK that could force the EU to delay Brexit. As of writing this article, GBPUSD pair is trading at 1.3045 down by 0.41% on the day. Despite prevalent bearish pressure on British Pound and recovery of US Greenback’s strength in the global market during the latter half of yesterday’s, the pair failed to see a bearish bearkout.

The entire focus of players surrounding the pair is now on Brexit headlines which continues to dictate price momentum. Ahead of further proceedings in UK parliament, investors wait for today’s macro calendar outcome for short term profit opportunities. UK calendar sees the release of Construction PMI while US calendar sees the release of Core durable goods orders data. Given dovish fundamentals and prevalent selling pressure on Sterling, the path with least resistance moving forward is to the downside. But Brexit headlines is likely to cause high level of volatility and price swings which suggests range bound action with bearish bias is likely to continue in immediate and near future trading sessions.

Please feel free to let us know what you think in the comments below.