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

Thin liquidity conditions to restrict moves within a well-defined trading range
Colin First
GBP/USD daily chart, December 11, 2018

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.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US