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GBP/USD Price Forecast – Rangebound Action To Continue In Near Future

By:
Colin First
Updated: Feb 28, 2019, 18:40 UTC

UK Parliament meeting outcome resulted in GBPUSD pair declining from multi-month highs but hopes for a delay in Brexit keeps the pair trading positive and well near previous session highs.

GBPUSD Thursday

The GBPUSD pair saw positive price rally across yesterday’s trading session supported by Brexit optimism. The pair scaled new multi-month highs ahead of the UK parliament session moving well above 1.33 handle on hopes for either delay in Brexit deadline to avoid no- deal scenario or a push for the second Brexit referendum as deadline nears with each passing day. However, the lawmakers didn’t vote on either of these scenarios and instead chose to wait as PM May promised lawmakers that they time will get another chance to vote on Brexit delay during the next meeting scheduled on March 12, 2019 if she fails to make changes in current deal with EU.

GBP/USD Slightly Lower Ahead of US GDP

The outcome of parliament added bearish pressure to GBP resulting in consolidative price action slightly lower than 7-month highs hit earlier yesterday. But US market session saw Dollar regain strength influenced by a spike in long term US treasury yields and this caused the pair to decline further. As of mid- Asian market hours the pair declined further below and is currently trading range bound near five-month highs. As of writing this article, the GBPUSD pair is trading at 1.3281 down by 0.22% on the day. While Brexit progress holds greater control over price action of GBPUSD pair, now that major events have come to pass and price action remains unchanged, investors are looking to macro data updates for short term profit opportunities.

On the release front, the UK economic calendar sees the release of Nationwide HPI while the US economic calendar sees the release of Preliminary Q4 GDP update and a speech by Fed members Bostic, Harker, and Kaplan. The speech from Fed members are unlikely to influence any change in price rally as they are likely to re-affirm the Fed’s dovish stance similar to Fed Chair Powell’s speech from early this week. A better than expected GDP reading is likely to influence further downside price move but the decline is likely to be capped near mid-1.32 handle resulting in rangebound price action in the near future as investors still hope for a delay in Brexit. Expected support and resistance for the pair are at 1.3250, 1.3200, 1.3165 and 1.3329, 1.3350, 1.3390 handles respectively.

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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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