GBP/USD Price Forecast – British Pound To Trade Range Bound Ahead of UK CPI Update

GBPUSD pair also saw recovery price action in broad market yesterday similar to other major Forex currency pairs. However, the upside move was muted when compared to other major global currencies as Brexit uncertainties capped upside move of bulls. A clear lack of progress from PM May’s end while stressing that UK will exit EU on March 29 deadline and Bank of England Governor Mark Carney’s comments stating that Monetary Policy Committee lacks directional cues in case of No-deal  exit added pressure to GBP bulls as UK parliament is set to meet tomorrow for discussing Brexit progress. However, subdued US dollar in the broad market owing to profit booking activities and increased risk appetite in the market over Sino-U.S. trade deal optimism helped the pair stage solid recovery price action.

Pair Lacks Directional Strength From Technical Perspective

The pair managed to breach 1.29 handle yesterday but soon began a consolidative price action and by Asian session, the pair fell below 1.2900 mark as Brexit uncertainties continue to drag the pair into bears territory. As of writing this article, GBPUSD pair is trading flat at 1.2893 up by 0.02% on the day well near 1.29 handle as investors await UK CPI data for directional cues before placing further bets.  Given the fact that Brexit headlines continue to control long term price action, the pair is likely to see the steady decline even if headlines influenced momentum gives the pair an upside swing every now and then. A clear lack of fundamental support and turbulent political climate adds a significant level of bearish influence on British Pound in the broad market.

On the release front today, both sides of pair see a high level of activity and this is expected to keep the pair highly volatile with plenty of short term profit opportunities. UK calendar sees the release of CPI, CPIH, PPI input & output data while US calendar sees the release of Building Permits, Unit Labor Costs and Core CPI data, Goods trade balance and housing starts updates. Given healthy risk appetite in the broad market, US macro data is unlikely to have any impact on US Greenback today as Dollar failed to recover on positive comments from Fed Chair Powell’s speech and better than expected Jolts Job openings data. When looking from a technical perspective, the pair lacks a clear directional bias as price action is well below 100 & 20 MA’s in the hourly chart and below 20 MA in the daily chart. Similarly, momentum indicators RSI & Stochastic tested overbought region but have made a downward incline towards neutral level in hourly chart and trades flat slightly below neutral level but in parallel to the oversold region in the daily chart.

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