GBP/USD Price Forecast – GBP/USD Consolidates Overnight Gains Ahead of Headlines From EU Summit

The pound held onto most of gains from previous session during Asian market hours after British Prime Minister Theresa May survived a no-confidence vote, buying time to try to steer her unpopular Brexit deal through a deeply divided parliament. In Britain, lawmakers from the ruling Conservatives held a secret ballot on whether they had confidence in May’s leadership of the party, which saw PM May win support from 200 lawmakers out of total of 317 lawmakers who took part in voting process. However there hasn’t been any signal of Brexit deal being approved in UK parliament any time soon which indicates that the current positive price action is likely to be short lived. Moving forward investors are on lookout for Brexit headlines as PM May will meet EU representatives during today’s EU summit.

Brexit Uncertainties Continue To Pressure GBP

Meanwhile, May’s promise to not seek re-election within the Tory party seems to have won over some hard-line Tory members in Wednesday’s closed vote but headlines indicate that EU leaders are increasingly unwilling to give May time for further deal negotiations and trade talks. UK’s newspaper, The Telegraph print stated that the “European Union (EU) leaders are poised to spend only 10 minutes speaking with UK PM May” and quoted a senior EU diplomat saying “The European Union is poised to reject Theresa May’s demands for “legally binding assurances” that the Irish backstop will only ever be temporary” which put a great dent in Brexit deal that has been approved by EU. As of writing this article, the GBPUSD pair is trading near flat at 1.2622 down by 0.06% on the day.

On release front, UK’s calendar has no major release for the day leaving the pair at mercy of Brexit headlines once again while USD price dynamics in broad market could also have some impact on pair’s price action later in the day. US markets will see release of Import and Export price index and Initial jobless claims data scheduled to release at 13:30 GMT. While Jobless claims data has a positive forecast, investors continue to remain wary as recent past saw many indications of economic slowdown in US. If the data turns out to be dovish investors believe that the numbers-sensitive Federal Reserve could emphasize on economic slowdown and put a pause to rate hike proceedings which will greatly dent USD’s outlook in broad market giving GBP bulls more momentum in short to medium term amid ongoing Brexit angst.