GBP/USD Price Forecast – GBP/USD Range Bound Ahead of Holiday Thin Market

The GBP/USD pair had a good two-way price action on Friday and was solely influenced by the US Dollar price dynamics. After an initial uptick to the 1.2700 neighborhood, mixed UK macro data – the final GDP print and current account numbers, coupled with resurgent USD demand dragged the pair to an intraday low level of 1.2618. The UK final reading for the third-quarter GDP confirmed the previous estimate of 0.6% Q/Q increase and 1.5 % y/y, while the UK current account deficit rose more than expected to £26.5 billion in the third quarter. From the US, the third quarter GDP growth was revised down to 3.4% from 3.5%, though did little to provide any provide any meaningful boost to the pair.

Market To Close Early On Account of Christmas Eve

The pair finally ended the day in red, through managed to post modest weekly gains and snap five consecutive weeks of losing streak. As of writing this article, GBP/USD pair is trading at 1.2666 up by 0.17% on the day. The Sterling heads into a thin Monday London market session with nothing meaningful on the economic data docket, seeing a free and clear economic calendar for the day. The pair is locked inside familiar levels for now as it continues to struggle to develop meaningful gains into the 1.2700 handle. Meanwhile the pair will continue to be driven by Brexit headlines as January will see a wealth of high impact news from GBP all of which currently point to high chance for downward price action. Market is expected to close early today on event of Christmas eve and will remain closed for next two days on account  of Christmas and Boxing day celebrations.

When looking from technical perspective, the pair has been oscillating in a broader trading range over the few trading sessions, forming a rectangular chart pattern on short-term charts. With global markets set for the year-end holiday season, the pair seems more likely to hold within the mentioned trading range amid relatively thin liquidity conditions. Hence, any further up-move might continue to confront some fresh supply near the 1.2700 handle, above which the pair is likely to aim towards testing the 1.2730 resistance zone. On the flip side, immediate support is pegged near the 1.2600 handle, which if broken might turn the pair vulnerable to head back towards testing the 1.2545-40 intermediate support en-route the key 1.2500 psychological mark.