GBP/USD Price Forecast – British Pound Continues To Suffer Loss On Account of Brexit

The price action for GBPUSD pair yesterday was steady downtrend move as Brexit uncertainties and headlines on Brexit proceedings continues to hurt British Pound in the broad market. Pound suffered declines from the start of the day as USD regained strength in the broad market while cautious sentiment ahead of UK parliament session further added to bearish influence surrounding GBP. The parliament session outcome unexpectedly turned out to be against British Pound as PM May failed to garner support for her future plans of action from pro-Brexit lawmakers who were expected to stand behind her as per headlines from early in the week.

GBP Pressured As No-Deal Exit Scenario Seems Highly Likely

As a result, British Pound saw sharp declines all the way to the upper half of 1.27 handle. However, declines were prevented as US Dollar lost its strength from the earlier rally as disappointing macro data hurt USD’s price action across the board. This lead to rangebound price action in the upper half of 1.27 handle which has remained steady across Pacific-Asia market hours and is expected to continue for a better part of London market hours. As of writing this article, GBPUSD pair is trading at 1.2795 down by 0.12% on the day. Given the fact that the no-deal exit scenario is the most likely outcome moving ahead unless an extension of article 50 deadline is completed before March 29, 2019, the medium to long term outlook remains dovish for GBP.

Moving forward, broad-based USD price dynamics and macro data outcome are likely to control price action as trading session approaches weekly closing. On the release front, UK calendar will see the release of retail sales data while US calendar will see the release of Empire State Manufacturing Index data, industrial production data and Prelim UoM Consumer Sentiment update which are expected to provide plenty of short term trading opportunities for rest of the day. GBP will suffer further declines if retail sales data disappoints as it will be viewed as the impact of Brexit uncertainties on the UK economy. When looking from a technical perspective, the path with least hindrance moving forward is to the downside. Expected support and resistance for the pair are at 1.2750, 1.2700 and 1.2810/20, 1.2845 respectively.

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