GBP/USD Price Forecast – GBP/USD on Bear’s Grip over Brexit Related Weekend Headlines

The British Sterling opened on Monday with a bearish note over weekend proceedings on Brexit talks. And current status indicates that UK-biased agreement looks highly unlikely. Brexiteers have to choose between economic security or UK sovereignty. Pound Sterling enjoyed a strong end to June with a 1.0% jump against the US Dollar which took the market from sub-1.31 back above 1.32 handle, however unfavorable situations surrounding Brexit talks has led the pair back to 1.31 handle ahead of London market hours. A cabinet minister says he is “confident” his colleagues will settle their differences over Brexit at a crunch summit at Chequers on Friday. James Brokenshire said there were “strong views” on both sides but predicted the away-day would yield a “clear direction” from the UK. Ministers are under increasing pressure to spell out what type of relationship with the EU the UK should pursue. EU chiefs demanded clarity from the UK at last week’s Brussels summit. Theresa May has promised more details in a White Paper that will be published after Friday’s cabinet get-together at her official country residence.

GBPUSD Under Pressure

The week ahead will see a highly volatile GBPUSD pair as each day will see a major macro-economic data released that will show the current inflation rate and there is also a speech by Bank of England Governor on Thursday. With updates from Brexit talks and high impact macro data update in UK’s calendar Sterling investors will see lot of volatility, meanwhile US market is also likely to provide high volume of activity making it a good time for investors to make short term bets.

On release front today, UK will see Manufacturing PMI data while US market will see ISM manufacturing PMI & Employment data. A positive outcome in Manufacturing PMI is likely to push GBPUSD pair above 1.32 handle as forecast for construction PMI scheduled tomorrow is hawkish which would result in GBPUSD seeing upward momentum during the next 48 hours of trading session. The UK economy slowed sharply in the first-quarter so policymakers and economists have been watching for signs as to whether this was a seasonal blip or the beginning of a more protracted slowdown. Thursday Bank of England governor Carney will give an as-yet unspecified speech in Newcastle, England so markets will listen closely for clues as to his latest take on the economy, as well as the outlook for UK interest rates. These news updates will set course for further directional movement of pair in long term. Expected support and resistance for the pair for the week are at 1.3150 / 1.3120 / 1.3090 & resistance is expected at 1.3190 / 1.3230 / 1.3260 respectively.