GBP/USD Price Forecast – Sterling Opened Positive for the Week on New of Sino-.U.S. Trade Truce

GBP/USD has managed to recover to familiar levels near 1.2770 during early market hours and is trading positive in broader market supported by positive investor sentiment and boosted risk appetite over headlines that indicated positive progress in Sino-U.S. Trade talks during weekend. However the G20 Leader’s Summit already in the rear view mirror as Brexit concerns have come back to main focus of investors which capped the gain for Sterling despite US Greenback being underbid in market. Investors are now bracing for the upcoming parliamentary vote on Prime Minister Theresa May’s Brexit proposal in the House of Commons on December 11th. As of writing this article, GBPUSD pair is trading at 1.2780 up by 0.24% on the day.

Macro Data Schedule To Keep Volatility Active Across The Day

Things are looking bleak for PM May and her current Brexit proposal which was unanimously approved at a Brexit Summit by the European Union a few days ago. While sterling saw positive headwinds over news last month that no-confidence vote on PM Theresa May is highly unlikely to pass owing to lack of required number of participants, analysts believe the situation may come to pass during parliamentary meet scheduled on Dec 11, 2018 as the deal faces high level of resistance in UK with lack of support from PM May’s own party and allies. A rejected deal will see UK head towards March 2019 with a no-deal brexit scenario and give hard Brexiteers enough clout and support from Parliament for them to initiate a no-confidence vote on PM May.

On release front, both calendars are highly active with PMI updates. UK’s calendar is scheduled to see   release of Manufacturing PMI at 09:30 GMT  and is forecast at 51.5 while previous reading was at 51.1 While US calendar will see release of ISM Manufacturing PMIs at 15:00 GMT forecast at 57.8 while previous reading was at 57.7. When looking from technical perspective, the pair is painting a g a long-term dominant bearish trend. Readings in the daily chart maintain the risk skewed to the downside, as the pair is developing far below moving averages while the RSI indicator resumed its decline, now gaining downward traction at around 42. In the 4 hours chart, the 20 SMA heads mildly lower around 1.2770, providing an immediate short-term resistance, while technical indicators head lower within negative levels. The risk of a downward extension will increase on a break below 1.2724, November 27th daily low.