GBP/USD Price Forecast – GBP/USD Trades Flat As Sterling Remains Vulnerable To Brexit Chaos

The GBPUSD pair opened for the week on flat note and has maintained a range bound fashion similar to EURO, but the price action also shows signs of bearish bias. While two major figures resigned from Prime Minister May’s Tory party, there wasn’t any other major headlines surrounding Brexit as no new members resigned and no challenge was made to PM May’s leadership resulting in pair remaining highly vulnerable to  whiplash Moves. The week ahead looks highly volatile as last week’s deadlock surrounding Brexit proceedings and UK’s political crisis could see progress in days to come. Analysts speculate that enough Tory members’ letters have been gathered over the weekend to mount a challenge, but it is not clear yet if the required number of votes in parliament to win the vote of no confidence has been gathered yet.

Lack of Major Macro Data Leaves Momentum in Mercy of Brexit Updates

Without that, an unsuccessful challenge would leave May immune to any further attempts to oust her for 12 months. The investors focus will then turn to how Prime minister May manages to push through her draft for Brexit deal or if the deadline passes through with no deal Brexit scenario. For now the flat price action in GBPUSD pair could be viewed as a result of cautious investor stance following members of US Fed expressing concerns over global economic growth citing situations in Europe and China and that global economic slowdown could play a major role in US economic outlook which was interpreted as dovish tone resulting in broad based US Greenback’s weakness in early Asian market hours. As of writing this article, GBP/USD pair is trading at 1.2826 down by 0.15% on the day.

As reported by Reuters, the results of an early Monday IHS Markit poll is showing business confidence within the UK slumping to a 2009 low as Brexit stress continues to take chunks out of firms’ outlook. Plans for hiring and investment across both manufacturing and services firms sagged, according to a quarterly report from data firm IHS Markit, which also compiles the closely watched purchasing managers’ indexes. This indicates that macro data outcome in near future could have bearish outcome which is highly bearish for British Pound’s medium to long term outlook. The macro calendar remains silent both US and UK which leaves the pair in mercy of Brexit headlines. Expected support and resistance for the pair are at 1.2810, 1.2765, 1.2725 and 1.2845, 1.2890, 1.2530 respectively.