GBP/USD Price Forecast – GBP/USD Trades Flat Amid Lack Of Brexit Progress & Silent Macro CalendarBrexit progress has stalled and economic calendar is wearing down ahead of the Christmas holidays, leaving the Cable to spiral out.
GBP/USD is getting more comfortable on higher ground as the drama around Brexit is not as intense as it used to be. GBP/USD is trading just north of 1.2600 heading into Tuesday’s main trading sessions, but bidding interest in the Sterling looks relatively low making broad based US Dollar weakness as sole driver of momentum. UK Prime Minister Theresa May delivered a fresh round of talking points on Brexit before the UK’s parliament on Monday, but little new developments were delivered.PM May also announced that she will be withholding her current Brexit proposal from a parliamentary vote until mid-January while her camp is trying to use last minute rush as an opportunity to force no-voters into supporting her as there would be little chance to negotiate alternative deal owing to existing deal’s pending approval.
PM May Intentionally Sabotages Brexit Progress
Mrs. May’s intentional sabotage of the Brexit time line has seen the Labor opposition party’s leader, Jeremy Corbyn, put forward a motion for a parliamentary no-confidence vote in PM May’s government, but that measure will also not be appearing until January, and the Cable is set to grind it out through the Christmas holiday season as investors await plenty of action to come in the new year. As of writing this article, GBPUSD pair is trading flat at 1.2626 up by 0.08% on the day. Investors are maintaining cautious tone ahead of tomorrow’s key event US FOMC update which will decide medium term outlook of dollar based on the outcome. However investors will have short term opportunity during US market hours owing to release of US Building permits and housing starts data.
When looking from technical perspective, the GBP/USD pair stays at risk of falling further. In the 4 hours chart, the price is currently struggling with a 20 SMA that lost its early upward strength, while the 200 EMA in the same chart continues gathering downward momentum far above the current level, now at around 1.2780. Technical indicators lack directional strength around their mid lines, with the Momentum still developing below the 100 level, indicating absent buying interest. The pair could gain some ground on a break above 1.2686 the high set last Thursday, yet gains beyond 1.2700 seem unlikely as long as Brexit chaos prevails. The bearish potential will increase short-term on a break below 1.2590, the session low and the immediate support.