GBP/USD Price Forecast – British Pound Trades Positive On Hopes of Brexit Progress

GBP/USD pair was subjected to strong two price action yesterday as the pair continues to be driven by brexit headlines influenced price momentum. Ahead of Brexit vote in UK parliament, British Pound saw sharp fall as it was unable to breach strong resistance surrounding mid 1.28 handle.The decline was further aggravated by retail traders who wanted to book profits on recent gains which resulted in a near 200 pip price drop. However as investors had already priced in rejection of deal from UK House of Commons session, the pair reversed all losses suffered earlier in the day and moved back near mid 1.28 handle. However turnout of vote against the deal was one of the worst in recent history enough to be called worst loss for government in a century. The vote break up turned out to be 432 votes against the deal versus 202 in favor of deal.

PM Theresa May Likely To Win Confidence Vote

Having cleared a major hurdle, British Pound is trading positive as investors hope for progress on Brexit front. While there are multiple probabilities such as No-deal Brexit, extension of Article 50 or possibility for further concession and changes from EU in hopes that they would want to salvage proper exit as EU is already weakening from economic perspective owing to ongoing internal political strife with Italy and France. Regardless of the outcome, there is going to be progress and this is viewed as positive factor for GBP. Following disastrous outcome in Brexit deal vote Opposing party leader Jeremy Cobryn has called for vote of no-confidence on PM May but he is unlikely to win the same as MP’s wish for faster resolution on Brexit front. Meanwhile PM May has said that in case she wins the vote against her, she will initiate cross party talks for discussing further progress in Brexit front.

As of writing this article, GBP/USD pair is trading at 1.2853 up by 0.12% on the day. On release front, calendar on both sides of Atlantic is very busy today. UK market sees the release of CPI, PPI data from UK and Retail sales, Crude Oil Inventory data from US markets.  UK inflation data is forecast to see declines, while expected readings could see pair continue bullish price action with slight declines, worse than expected readings could push the Pound back to previous session’s lows. Aside from macro data updates which are set the keep the pair highly active for rest of the day, investors focus in on speech by Bank of England Governor Mark Carney which will have great impact on British Pound’s ongoing bull run. British Pound  will continue its bull run in near term if macro data meets or turns out to be better than expected along with hawkish comments from Carney while hints of Caution in Carney’s speech will influence downside price action.