GBP/USD Price Forecast – Caution Ahead of US Senate Meeting Limits Positive Price Action

British Pound continues to retain its positive price action as bulls continue to receive positive influence from Brexit related headlines. Price action surrounding British Pound has been controlled by Brexit proceedings for the majority of last quarter and while price action was highly bearish till December 2018, latest proceedings in Brexit has whipped up a cocktail of factors that have kept positive price rally sustained for the majority of this month. Late yesterday news hit the market that 20 ministers met in UK parliament in secret to discuss plans to stop a no-deal Brexit scenario with the main focus on the amendment submitted by senior labor party MP Yvette Cooper.

UK Headlines Hint At Possibility To Avoid No-Deal Brexit Scenario

The amendment continues to garner more support from members across various political parties in the UK and is even rumored to receive the backing of Labor party leader Jeremy Corbyn who views this amendment as a possibility that could lead to second Brexit referendum in the UK. The amendment is set to be voted at same time PM May’s plan B is considered in UK parliament later this month and if approved would give MP’s the power to stop no-deal scenario by extending article 50 deadline with EU in case a consensus is not reached on Brexit deal on or before 26-Feb-19. Further US Greenback in broad market lost ground last night following a sharp decline in 10—year US Treasury bond yield which combined with the partial shutdown in US government and dovish fed stance on rate hike plans for 2019 increased bearish pressure on USD significantly.

As of writing this article, GBPUSD pair is trading flat at 1.3054 down by 0.10% on the day. The decline from previous session high which saw pair test price level near 1.31 handle is owing to profit booking activity post-140-pip rally and consolidative price action as investors have turned cautious ahead of today’s US Senate meeting, where members are expected to vote on re-opening the government. Meanwhile, the pair is expected to continue steady positive price action across London market hours with strong support seen around 1.3000 handle. UK’s calendar is silent for the day, while U.S. market will see the release of Preliminary Service and Manufacturing PMU data which suggests major activity in the pair is likely to happen during American market hours on headlines and macro data-driven price action.