GBP/USD Price Forecast – GBP/USD Moves Sideways Amid Holiday Thin Marketthe GBP/USD is still moving sideways as upside is capped in range of 1.2660-1.2700 handle.
GBP/USD continues to play into the middle, firmly planted just south of the 1.2700 handle as apprehensive Cable traders see little reason to buy heading into the January Brexit gauntlet. The Cable has been constrained below the 1.2700 zone for several weeks after Brexit ground to a halt for the holidays, but January’s upcoming action will see Pound traders continuing to get hammered, as a parliamentary no-confidence vote in Prime Minister Theresa May is expected in the coming weeks, as is a final vote on PM May’s current Brexit deal, which Mrs May pulled last-minute after it looked certain to fail. As of writing this article, GBP/USD pair is trading flat at 1.2686 down by 0.11% on the day. The UK Parliament is set to resume debate on the UK PM Theresa May’s Brexit agreement in the week of January 7 and the meaningful vote is planned to be held before January 21.
2019 promises to open with more selling as Brexit looks to remain a dramatic downside factor
In the meantime, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum. Meanwhile, a modest USD rebound at the start of a new trading week kept a lid on any further up-move, rather prompted some selling from near two-week-old trading range resistance. Moreover, traders also seemed inclined to keep positions rather light amid thin liquidity conditions, which might eventually lead to a rather subdued/range-bound price action on New Year’s Eve. Monday sees little action for the Cable on the economic calendar, and markets are set for the New Year’s shutdown, and the latter half of the trading week could see a fresh influx of volume as traders jostle for position in early 2019.
When looking from technical perspective, the pair needs a sustained breakthrough the trading range hurdle, around the 1.2710-15 region, before traders start positioning for any further near-term positive momentum. Above the mentioned barrier, the pair is likely to confront some resistance near the 1.2735-40 region before darting towards reclaiming the 1.2800 round figure mark. On the flip side, the 1.2655 level now seems to protect the immediate downside, which if broken might accelerate the fall back towards the trading range support near the 1.2600 handle. A follow-through selling, marking a near-term bearish breakdown should pave the way for the resumption of the prior depreciating move and drag the pair back towards 1.2560-50 intermediate support en-route the key 1.2500 psychological mark.