GBP/USD Price Forecast – Consolidative Action To Continue Ahead of Today’s UK Parliament Meet

Brexit headlines and profit booking activity brings GBPUSD pair back to 1.28 levels where the pair has maintained a steady price action across last week. Friday saw  GBPUSD pair attempt to breach 1.30 handle, while the attempt was successful uncertainties surrounding future of Brexit progress coupled with profit booking action post a week-long bullish price action saw the pair take a corrective rally. This rally extended into early Asian market hours today but British Pound managed to limit declines above mid 1.28 handle post which the pair has maintained a range-bound price action ahead of London market hours. The weekend saw a flurry of headlines hinting at multiple possibilities for Brexit proceedings during today’s parliamentary meet in the UK. Friday’s cross-party talks initiated by PM May failed to generate any positive progress as Irish backstop continues to remain a thorn in proceedings.

Parliament Session Could Cripple PM May’s Brexit Negotiation Attempts

Despite headlines hinting at EU’s readiness to provide freshly written clarifications on Irish backstop, the issue hasn’t been resolved in the UK as PM May is unable to guarantee a no hard border scenario between Ireland and Britain. Today’s parliament meeting is expected to see PM May suggest a “Plan B” move in case of no-deal Brexit while headlines from weekend suggest that MP’s are expected to gather ahead of parliament session and create an amendment to be passed in today’s session which if passed would prevent possibility of a no-deal Brexit scenario. Headlines also suggest a possibility for an amendment to be passed in today’s session which will prevent establish a hard border with Ireland but how much was details mentioned in headlines are expected to come to pass during today’s parliament session remains to be seen.

As of writing this article, GBPUSD pair is trading flat at 1.2874 up by 0.01% on the day. Investors continue to exercise caution ahead of today’s parliament meet which suggests that chance for any major change in price action is unlikely resulting in consolidative action until updates from Parliament session hits the market. US market is closed for the day owing to the celebration of Martin Luther King, Jr- day which makes London market hours the key active trading session for the pair today. On the release front, both US & UK calendar remain silent aside from a speech by UK Prime Minister Theresa May. When looking from a technical perspective, the pair is now at a new key psychological price level and the breakout action following updates on today’s parliament session will decide short to medium term future of British Pound. A break below 1.2845 & 1.2819 handles will result in a sharp decline towards 1.26 handle while a break above 1.2895 will help sustain recent positive price rally.