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GBP/USD Price Forecast – GBP/USD Trades Relatively Flat Ahead of BOE Gov Carney’s Brexit Agreement Testimony

By:
Colin First
Published: Dec 4, 2018, 06:26 UTC

Brexit angst returns to the forefront as investors brace for a tense vote on December 11th.

GBPUSD Tuesday

The GBPUSD pair opened for the week on dovish note and saw some upward price action in positive investor’s sentiment across the globe over news of Sino-U.S. trade truce. But the positive price action was short lived as a late USD rebound kept a lid on any follow-through up-move which combined with ongoing brexit woes resulted in pair turning dovish. The buck got an additional boost following the release of stronger than expected US ISM manufacturing PMI for November but downside move was limited owing to declining US Treasury bond yields with yields on the benchmark 10-year bond sliding further below the 3.0% psychological mark which put an end to the USD demand.

Sterling Heads Into BOE Carney’s Brexit Agreement Testimony 

With no major geo-political event up ahead aside from OPEC meet, investors focus has shifted back to Brexit talks as a long round of debates on Prime Minister Theresa May’s current Brexit proposal is set to start today culminating in a yes/no vote in the UK’s House of Commons on December 11th. As of writing this article, GBPUSD pair is trading at 1.2746 up by 0.18% on the day. Moving forward, today’s market hours sees the Bank of England’s (BOE) Governor Mark Carney testifying before the Treasury Select Committee, alongside three of his Deputy Governors, in London today, with the actions slated to start at 09:15 GMT. Governor Carney and his three Deputies will be delivering their testimony on the current Brexit Withdrawal Agreement, and Carney’s words could heave the GBP markets.

When looking from technical perspective, the pair seems to be struggling near 1.2750 level hinting at possibility for continued bearish price action for British Pound. The pair bounced with dollar’s weakness in the American afternoon to turn neutral daily basis, now hovering around 1.2740-50 handle. The early rally was rejected by sellers around a daily descendant trend line coming from  November high at 1.3174 and settled below a mild-bearish 20 SMA in its 4 hours chart, also far below the 200 EMA. Technical indicators in the mentioned chart have managed to bounce from their daily lows but remained below their daily highs and below their mid-lines. The upside seems well limited as it would take at least a recovery above 1.2880 to take some pressure of the Pound. Expected support and resistance for the pair are at 1.2725, 1.2690, 1.2665 and 1.2770, 1.2805, 1.2840 respectively.

 

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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