GBP/USD Price Forecast – GBP Continues Positive Price Action on Broad Based Weaker USDthe spot manages to derive some comfort from broad-based US dollar weakness and a better risk environment on last trading session of the week.
The GBP/USD pair lacked any firm directional bias and traded in a relatively tighter range on Thursday amid a combination of diverging forces. The pair initially dipped to an intraday low level of 1.2616 on a report that showed the business confidence in the UK slumped to its lowest level in more than a year, dragged lower by Brexit uncertainties. However, the prevalent US Dollar selling bias helped limit any deeper pull-back rather assisted the pair to regain some positive traction. Reviving global growth fears triggered a fresh wave of global risk-aversion trade, which ramped up demand for the US Treasury bonds and undermined demand for the buck. As of writing this article, GBPUSD pair is trading at 1.2670 up by 0.21% on the day.
Upside appears limited by Brexit uncertainties and thin volumes
The greenback was further pressured by the US government shutdown, which coupled with the disappointing release of the US consumer confidence index for December, falling to its weakest level in more than three years, remained supportive of the pair’s modest uptick. The pair continued gaining some positive traction through the Asian session today and in absence of any major market moving UK economic releases, it remains at the mercy of the USD price dynamics. Later during the early North-American session, the second-tier US economic releases – Chicago PMI and pending home sales data, will now be looked upon for some short-term momentum play on the last trading day of the week.
When looking from technical perspective, the pair has been oscillating in a broader trading range over the past 1-1/2 week or so and any meaningful up-move might continue to confront some fresh supply near the 1.2700-1.2710 area. A sustained move beyond the mentioned hurdle, leading to a subsequent move beyond weekly tops, around the 1.2735-40 region, would mark a near-term bullish breakthrough the trading range and assist the pair to aim towards reclaiming the 1.2800 round figure mark, also coinciding with 50-day SMA. On the flip side, the 1.2630-25 region, closely followed by the 1.2600 handle might continue to protect the immediate downside, which if broken now seems to pave the way for the resumption of the prior depreciating move. Below the mentioned levels, the pair is likely to accelerate the slide towards 1.2560-50 intermediate support before eventually dropping to challenge the key 1.2500 psychological mark.