GBP/USD Price Forecast – British Pound Steady Above 1.29 Handle On Investor Optimism

GBPUSD pair continues to remain as sole major forex instrument that doesn’t operate on broad market price pattern. While issues such as Sino-U.S. trade war proceedings and cues from political struggle in various European nations continue to dominate price action of high-risk assets on the global stage, said factors have had little to no impact on GBP in immediate and recent past as Brexit remains the sole driving force behind the pair’s price momentum. British Pound got a bullish boost yesterday in London market hours following upbeat employment data which resulted in pair breaching 1.29 handle. Further, the pair built on positive price action in US markets hours as conflicting headlines relating to Sino-U.S. trade talks pulled down US equities lower resulting in Greenback seeing decline in the broad market.

Brexit Continues To Remain Main Driving Force For GBP Bulls

This move helped GBPUSD pair breach mid 1.29 price range and consolidate intra-day gains. However, Greenback began recovering strength in Asian market hours as global investors continue to remain cautious amid global growth worries and increasing Sino-U.S. trade tensions. The risk-off trading activity in equity markets helped underpin demand for Dollar as a safe haven asset, but partial shutdown of US government and dovish fed stance on rate hike plans for 2019 continue to hinder USD bulls in broad market helping GBPUSD pair maintain range-bound price action above 1.29 handle. While rebound in Asian market session dragged the pair down from overnight high’s GBP bulls still hold control over price momentum. As of writing this article, GBPUSD pair is trading at 1.2960 up by 0.02% on the day.

The ongoing positive price action in GBP is backed by investors’ expectations for a possible soft deal exit of Britain or a possible extension of article 50. However there is immediate hurdle in form of month end Parliament session which will see MP’s vote on PM May’s Plan B. While headlines suggest Plan B is more accommodative than Plan A, PM May is unable to sort out clear details despite holding cross-party talks as opposing party leader Jeremy Corbyn wants no-deal scenario to be taken off the table. Further, Corbyn is also pushing for an amendment during the upcoming parliament session for second Brexit referendum in hopes that citizens would vote to cease Brexit progress altogether. The upcoming parliament vote later this week will be the key factor deciding medium to long term outlook ahead of which GBP is expected to retain its positive price action. Investors now await a speech by BOE MPC member Broadbent and his comments are expected to provide direction cues for short term trading activity. Expected support and resistance for the pair in immediate future are at 1.2942, 1.2910, 1.2895/85 and 1.2975, 1.2990, 1.3000 respectively.