GBP/USD Price Forecast – British Pound Displays Bullish Resilience On Hopes For Brexit Delay

The GBPUSD pair last week saw positive price action when considered from a weekly basis but saw sharp declines on the last trading session of the week as a basket of factors weakened British Pound in the broad market. Yet another UK parliament session failing to take key steps necessary to delay Brexit or push for the second Brexit referendum was a key factor weighing down GBP. The bearish sentiment was further intensified following worse than expected Manufacturing PMI in the UK which was a sign that the manufacturing sector continues to be influenced by Brexit uncertainties and is continuing to suffer major losses. Further, a positive US Greenback supported by optimism surrounding Sino-U.S. trade talks added to declines. Upbeat Wall Street performance boosted US T.Yields underpinning dollar bulls on its rally causing the pair to 1.3200 handle but disappointing US macro updates helped limit declines above mid-1.31 handle.

Trump’s Tirade Caps USD’s Gains

Investors continue to hope that there will a delayed Brexit and UK parliament will see to it during the upcoming session as only other outcome is a no-deal exit scenario which could be devastating for UK economy unless Second Brexit Referendum is put into course of action and even that is unlikely in the short period as deadline to leave EU is currently less than a month away.  This helped the pair find some footing above 1.3200 handle since trading session opened for the day where it has traded with a relatively positive bias. As of writing this article, the GBP/USD pair is trading at 1.3250 up by 0.36% on the day. The positive price action was further supported by US President Donald Trump’s comments from the weekend. While USD remains strong in the broad market supported by the performance of US T.Yields, President Trump’s usual tirade about US Dollar’s strength being too strong to point of hurting economy and Fed’s decisions which led to same capped the momentum of Greenback to some extent.

On the release front, both calendars are relatively silent today with US calendar lacking any major first tier and second tier data updates while UK calendar is silent aside from the release of first tier data Construction PMI which is unlikely to have any major impact on price action even in case of dovish outcome owing to possibility of disappointing outcome being already priced in over Brexit uncertainties. The price action will continue to remain in control of Brexit related headlines while a little influence from Sino-U.S. trade talks and U.S. macro data updates causing slight deviations every once in a while. In the current market and immediate future,  hopes for a delay in Brexit are likely to continue underpinning GBP bulls keeping price action in favor of British Pound. When looking from a technical perspective, the pair display some level of strong resilience visible from its upside pullback when trading activities opened for the week and this resilience is expected to last in immediate and near future trading sessions. The pair now needs to breach resistance near 1.3290 and 1.3314/19 handle for GBP to regain control of price action to the upside, while a decline below support at 1.3200/1.3190 and 1.3165/1.3151 price zones is required to USD to gain control of momentum ahead of which range bound action is likely to continue.