GBP/USD Price Forecast – GBP/USD Trades Flat Ahead of BOE Carney’s Testimony

GBP/USD is trading in range bound fashion around 1.285 handle keeping tied to familiar levels for the week as Sterling traders enjoy a breather from a hectic circuit of buying on hopeful Brexit headlines and then selling short on suddenly bearish Brexit headlines. Brexit remains a main problem for both sterling investors and Prime Minister Theresa May who is in a race against time in her attempt to strong arm her 500-page draft for Brexit ‘deal’ as Brexiteers within her own Tory party continue calling for a no-confidence vote in PM May’s office and the risks remain high as her own House of Commons may outright reject the current Brexit offering regardless of May’s efforts which could throw a major wrench in the works. As of writing this article the pair is trading flat at 1.2858 up by 0.02% on the day.

EU-UK Brexit Summit is Main Focus of Investors in Near Future

Moving forward, investors are now waiting for the upcoming EU Brexit Summit, where support is expected to be broadly received for the current Brexit plan. If no confidence vote doesn’t come to pass and PM Theresa May manages to retain her position, there is high chance for avoiding a no-deal Brexit situation. On the economic calendar for Tuesday, the Bank of England’s (BOE) Governor Mark Carney will be delivering his testimony in the British parliament for the latest Inflation Report Hearings, and Carney’s words could see far-reaching effects today if the UK’s central bank maintains a too-dovish stance while investors take a quick break from the Brexit rollercoaster.

On US market, investors will see release of Building permit and housing starts data and a better than expected outcome in US macro data could renew momentum for USD bulls which remain subdued so far over cautious investor stance following dovish comments from US Fed. The pair seems to have stabilized for now, but there is high chance for Sterling to resume downtrend price action as Brexit chaos hasn’t found a resolution yet. When looking from technical perspective, the upward potential is limited in the short term as in the 4 hour chart, the pair has been unable to settle beyond a strongly bearish 20 SMA which continues moving away from the 200 EMA. The Momentum indicator in the mentioned chart aims higher in neutral territory, but the RSI remains flat around 46. Expected support and resistance value for the pair are at 1.2810, 1.2765, 1.2725 and 1.2873, 1.2890, 1.2530 respectively.