GBP/USD Price Forecast – GBPUSD Range Bound Ahead of UK GDP UpdateBrexit headlines and UK macro data updates eyes for short term profit opportunities
GBPUSD pair saw a sharp spike on renewed Brexit optimism last Thursday post which it has been on a steady range-bound price action with a bearish bias. Owing to clear lack of fundamental support for GBP bulls and strong greenback in the broad market, US dollar has managed to slowly induce bearish price action while investors hopes for soft Brexit helped to keep declines well above 1.29 handle across Friday and today’s Asian market hours. While Bank of England kept interest rates unchanged, they warned about the negative influence of Brexit uncertainties on the British economy. However, BOE Governor Mark Carney maintained a relatively neutral pace during his post MPC press conference which supported GBP bulls as investors took his neutral speech as hopes for soft Brexit outcome.
Brexit Uncertainties Cap Upside Move For GBP Bulls
Another reason for GBP’s stability above 1.29 handle is its reduced trading volume. Given the BOE has mirrored ECB reducing UK growth forecast for 2019 despite both central banks basing their decisions on different reasons. Multiple bearish factors surrounding both sides of the currency pair has resulted in relatively subdued price action in the pair even after a short pause in trading activity over the weekend. The day ahead is filled with high impact macro data for GBP while the US calendar is silent for the day. Given lack of high impact news during the weekend and in Asian market hours, the pair continued with last week’s bearish decline albeit in range bound fashion. As of writing, this article GBPUSD pair was trading flat at 1.2935 down by 0.04% on the day.
On release front today, UK calendar is seeing the release of Preliminary Business investment data and GDP data for Q4, monthly GDP, Manufacturing Production, Industrial production, monthly GDP 3M/3M change, and NIESR GDP estimate update. When looking from a technical perspective, the path with the least resistance is towards the downside. The price action has fallen below 20, 50 and 100 moving average in hourly intra-day charts and momentum indicators RSI & stochastic are seeing their signal line move well near and in parallel to the oversold region in intra-day charts indicating clear dovish sentiment surrounding pair from technical data. Expected support and resistance for the pair are at 1.2910, 1.2890, 1.2853 and 1.2960, 1.2982, 1.2995/1.3000 respectively.
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