GBP/USD Price Forecast – GBP/USD Trades Flat As Brexit Woes Limit Upside Move Amid Sundued USDThe Brexit headlines might continue to act as an exclusive driver of the sentiment surrounding the British Pound in near future.
The GBP/USD pair had a good two-way move on Thursday but finally managed to end the day in positive territory for the second consecutive session. The British Pound remains supported by the UK PM May’s victory in the leadership challenge on Wednesday and got an additional boost from some positive comments by the UK Brexit Secretary Stephen Barclay, saying that the direction of travel on the backstop is moving in the right direction and both sides see it as temporary. The pair climbed to an intraday high level of 1.2687 yesterday though concerns over May’s ability to get her Brexit deal through the parliament kept a lid any strong follow-through. The pair traded with a mild negative bias through the Asian session on Friday but has still managed to hold its neck above the 1.2600 handle amid uncertainty over the Fed’s rate hike path in 2019, especially after the US President Donald Trump latest criticism on Thursday.
Warnings from Brussels that no further negotiation room is available are becoming increasingly stern
As of writing this article, GBPUSD pair is trading at 1.2624 down by 0.06% on the day with slow but steady downward decline heading into Friday’s London markets. The Cable market has stalled out as traders await further moves on Brexit, with little on the data docket to cap off a volatile week that has seen the Sterling peak-to-trough around 280 pips against the greenback. Yesterday’s EU summit saw representatives of the union firmly refuse PM May’s bid to seek even more negotiations in Brussels while declaring that no further concessions or negotiations will be taking place and stated that the offer on the table is all-or-nothing that UK will get from them. Meanwhile on EU’s end, President of the European Commission Jean-Claude Juncker announced earlier today morning that the European Union will begin publishing all information concerning a no-deal Brexit scenario and their preparations for such an event will begin on December 19th.
The UK economic docket lacks any major market-moving economic releases while the US economic docket highlights the release of monthly retail sales data for November along with Manufacturing and Service PMI data which suggests that today’s session will offer some short term opportunities for traders during north American market hours when USD price dynamics could affect the pair’s price action slightly. From a technical perspective, the pair is developing above a firmly bearish 20 SMA but well below the 200 EMA which heads marginally lower at around 1.2820 price levels. Technical indicators have also lost the positive momentum and now hover around their mid lines. While these factors do not confirm a strong bearish price action, they continue to hint at risk being skewed to downside.