GBP/USD Price Forecast – Sterling To Trade Rangebound Ahead of Update From House of Commons

The GBPUSD pair yesterday saw steady downside price action as US Dollar regained strength in the broad market. A rebound in US T.Yields helped US Dollar regain strength while conflicting headlines relating to Brexit weighed down British Pound in the global market. The British Pound faced further bearish pressure on caution ahead of today’s parliament vote where lawmakers will vote on various amendments and make indicative votes to move forward with Brexit. Earlier this week, lawmakers in House of Commons voted on an amendment that gave lawmakers precedence over control on Brexit decision decreasing support and power for PM May and her government.

UK HOC Headlines Eyed For Directional Cues

Despite conflicting headlines, traders have finally gained clarity on fact that third vote on PM May’s Brexit deal is unlikely as lawmakers wish for a longer deadline extension. This has now created a scenario of stalemate as the EU doesn’t wish to renegotiate on Irish backstop agreement even if the UK participates on EU elections resulting in high level of uncertainties. As of writing this article, GBPUSD pair is trading flat at 1.3203 down by 0.03% on the day. Investors now await updates from UK parliament session as indicative votes will provide an idea on how lawmakers wish to proceed and if they are even willing to participate in EU elections as they are unlikely to get a longer extension in any other scenario.

While Brexit uncertainties are already pressuring British Pound, US Dollar has regained strength in the broad market on a rebound in US T-Yields. Investors await macro data updates which are likely to influence some volatility in price action leading to short term profit opportunities. On the release front, British economic calendar is silent for the day while the US economic calendar will see the release of trade balance and current account data updates. Post getting directional cues from UK parliament’s update later in the day, the pair will need to breach 1.3250/60 and test 1.3300 handle for GBP to regain control of price action while a decline below support at 1.3176/1.31665 handles with price reaching 1.3100 will be required for USD to establish dominance over price action.

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