FXEMPIRE
All

GBP/USD Price Forecast – GBP/USD Trade Range Bound As Investors Are Cautious Ahead of Brexit Vote

GBP/USD trades range bound as investors are cautious ahead of DEC 11 Brexit vote owing to high level of uncertainty about the future of deal and PM May’s Brexit Government.
Colin First

GBP/USD continues to trade sideways yesterday reaching daily peaks in the 1.2800 neighborhood before sinking back down into the 1.2700 region, though swing lows continue further into the downside. Meanwhile this week’s low of 1.2658 has tested the waters of a 19-month low for the Sterling as the run-up to December 11th’s Brexit vote continues to see the GBP/USD pair off-balance amid fear of a potentially disastrous outcome. According to the UK’s Telegraph, the current stacking of MPs in the UK’s House of Commons is currently set at 216 for and 423 against Prime Minister Theresa May’s current Brexit proposal, and despite several days of debates in the parliament ahead of December 11th’s MP vote on whether or not to accept the PM’s current deal, the odds remain stacked heavily against PM May and her shrinking constituency.

Economic data in the UK continues to disappoint as Brexit fear continues to take its toll

While yesterday’s up move was unaffected by USD’s demand from hawkish FOMC member comments and dovish UK macro data, A sudden spike in global risk-aversion, triggered by the US President Donald Trump’s latest comments on China trade, turned out to be one of the key factors that underpinned the greenback’s relative safe-haven status which dragged the pair below mid 1.27 price handle. Adding to this, growing concerns of investors over global economic slowdown and consecutive session of bearish rout in all key equity markets across the globe killed risk appetite in market considerably boosting demand for safe haven USD. The only thing keeping the Cable afloat in the broader markets is broader USD weakness owing to an inversion of the short end of the US Treasury yield curve hinting at recession in US markets.  As of writing this article, GBPUSD pair is trading at 1.2712 down by 0.17% on the day.

On release front, there isn’t any major market-moving economic data due for release from the UK, while the US economic docket highlights the release of the ADP report and ISM non-manufacturing PMI. With investors focus glued to the latest developments surrounding the UK’s looming departure from the EU, today’s US macroeconomic data seems unlikely to be a major game changer, though might assist traders to grab some short-term opportunities later during the early North-American session. When looking from technical perspective, the pair’s repeated failed attempts to find acceptance above 200-hour EMA clearly points to persistent selling bias at higher levels. The downside, however, remains cushioned ahead of the next big event risk and hence, the pair seems more likely to continue with its volatile swings within a broader trading range. Expected support and resistance for the day are at 1.2695, 1.2660 and 1.2760, 1.2800 respectively.

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