GBP/USD Price Forecast – GBP/USD Range Bound Post Sharp Decline As Traders Await Further Updates

The GBP/USD is unmoved in early Friday action as broader markets await more significant confirmations beyond the rumors. According to unverified reporting by the UK’s Daily Telegraph, the UK’s ruling Conservative party’s coalition deal with Northern Ireland’s DUP could be axed unless the Tories call for a no-confidence vote in PM Theresa May and install a new UK leader with more hard-line Brexit tendencies. Theresa May’s latest draft proposal has seen another round of ship-jumpers from within her own government, with Dominic Raab resigning as Brexit minister and Esther Mcvey vacating her seat as the work and pensions minister, leaving the prime minister further isolated within her own government, and key Tories within the UK government have allegedly already delivered letters recommending a no-confidence vote in PM May’s government.

Investors Await Confirmation on Rumors Surrounding No-Confidence Vote Before Placing Major Bets

As political climate took a turn for worse the pair saw sharp bearish decline yesterday and the pair has since maintained a range bound price action near yesterday’s lows ahead of London market hours. As of writing this article, the GBPUSD pair is trading at 1.2804 up by 0.24% on the day. The value pf bearish bets surrounding British Pound surges to highest level since September 2016 as one-month 25 delta risk reversals (GBP1MRR) are currently trading at -2.76 in favor of put options. Moving forward, Brexit related headlines will continue to dictate price action surrounding GBP & related markets as investors now await fresh developments in UK’s Political scenario. While Prime minister Theresa May managed to clinch a new deal with UK, she continues to lose more support from her side as the yet undisclosed deal doesn’t seem to have the number of concessions that he UK’s Tory government is willing to settle upon.

The economic calendar for the UK side remains empty for Friday, leaving the GBP exposed to the full force of Brexit headlines for the day’s session, with only Industrial Production for the US trading window at 14:15 GMT, but the mid-tier indicator is unlikely to drive much momentum as broader markets sentiment continues to be swayed by Brexit proceedings and UK’s political updates when compared to US Greenback’s headlines as long as GBP/USD pair is concerned. When looking from technical perspective, the pair has declined over 300 pips in last 24 hours and technical readings seem well aligned with fundamental background which signals possibility of continued bearish decline in near future. The 4 hours chart shows that the battle around the 200 EMA was lost by bulls, with the pair now roughly 200 pips below it, also below a bearish 20 SMA as indicators in the mentioned chart maintain their strong bearish slopes near oversold readings.