GBP/USD Price Forecast – GBP/USD Trades Range Bound Above 2018 LowsWith the Brexit deal’s parliamentary vote officially delayed, PM May now has to survive an onslaught of no-confidence letters putting significant level of bearish pressure on British Pound.
Having hit a new 2018 lows at 1.2480 during yesterday’s trading hours on Brexit headlines the pair is down for a sixth consecutive week but there are no signs of downward exhaustion, neither of an upcoming change in the current downward trade. Following recent declines, British Pound has become the weakest currency of G-20 bloc as of today. While the UK found some support on downside owing to positive macro data released yesterday, News that German Merkel rejected UK’s May attempt to renegotiate the Brexit deal and renewed speculation that MP’s have sent 48 letters for a no-confidence vote on PM May keep Sterling under considerable bearish pressure.
Investors Focus on Updates Related To UK- EU Meet Scheduled Tomorrow
As minimum requirement for no-confidence vote has now been met according to headlines, traders await news of official proceedings to began soon however such a situation may not come to pass as this is not first time headlines hinted at no-confidence vote proceedings on PM May and Parliamentary vote on Brexit deal was canceled which brings the UK representatives back to negotiation table tomorrow during meet with EU representatives who have so far maintained their stance stating no new deal will be made with the UK. As of writing this article, GBPUSD is currently trading at 1.2507 up by 0.14% on the day. However, the pair continues to trade just slightly above overnight lows as Pound bulls lack trigger to move up while US dollar saw fundamental support in form of positive macro data yesterday.
Immediate downside move has been limited owing to renewed optimism surrounding Sino-U.S. trade-related talks which boosted risk appetite and put an end to US Greenback’s overnight gains. On the release front, UK’s calendar has no releases for the day while US calendar will see the release of Core CPI data and Crude Oil Inventories data.
When looking from a technical perspective, the pair is trading below Monday’s closing level and posted a lower low and a lower high daily basis, signaling bears hold the grip tight. In the shorter term, and according to the 4 hours chart, the risk is also skewed to the downside, as the 20 SMA accelerates south well above the current level, while technical indicators quickly resumed their declines after correcting oversold conditions, now maintaining strong downward slopes. Expected support and resistance for the pair are at 1.2490, 1.2465, 1.2430 and 1.2550, 1.2590, 1.2640 respectively.