GBP/USD Price Forecast – GBP/USD Range Bound Near Previous Session Highs Ahead of Brexit Vote

GBPUSD pair continues to trade positive for second consecutive trading session as contradicting headlines continue to favor GBP bulls. Despite majority of investors believing that deal would be rejected by UK house of commons, the pair continues to trade positive as investors have already priced in parliamentary rejection of PM May’s deal. While headlines hints at extension of article 50, it is highly unlikely as UK Prime minister May stands firm on her stance that UK will exit European union as previously decided on March deadline. Following today’s vote PM May is set to face no confidence vote against her in UK parliament. However she is likely to win the vote against her once again as Laboratory lacks the number of vote to oust Theresa May from her position.

Brexit Vote Turn Out Will Decide Near Term Price Action

The pair is moving range bound near previous session high’s as investors are cautious ahead of impending brexit vote in house of commons. Investors focus now is on turn out of voting session and the outcome will decide if PM May could re-apply for another parliamentary approval. While an overwhelming rejection of deal will see GBP climb down from high’s, a marginal rejection would suggest that recent attempts from EU to help PM May has had some impact on MP’s in which case further support and negotiations could possible lead to UK exiting EU with a deal in place which is greatly positive for British Pound.  As of writing this article, GBPUSD pair is trading at 1.2902 up by 0.31% on the day.

Further, despite risk averse trading yesterday which helped USD recover slightly in broad market, it had little to no impact on GBPUSD pair whose price action is dominated by brexit proceedings. Further weak USD in broad market owing to partial shutdown in US government and dovish fed stance continues to support GBP bulls on their bullish rally. On release front, UK calendar is silent for the day aside from brexit vote while US calendar sees the release of PPI data, trade balance data and speech by FOMC members George & Kaplan which are expected to keep the pair highly active across the day. Expected support and resistance for the pair are at 1.2865, 1.2830, 1.2805  and 1.2930, 1.2960, 1.3000 respectively.