GBP/USD Price Forecast – UK Macro Data To Decide Short Term Price Course For GBP

GBPUSD breached 1.29 handle once again yesterday as news of plan b action proposed by PM May in UK parliament hit the market. As per headlines, no clear details on plan b was given expect from certain facts which hinted that new course of action is very similar to plan A. PM May has stated she will meet with EU officials once again to try and iron out Irish backstop issue but she stands clear on her stance that no-deal Brexit will not be taken off the table and her government won’t allow a second Brexit referendum. With just 67 days remaining in the deadline, PM May’s plan B is set to be voted on UK Parliament during January 29, 2019. While News of plan B has helped British Pound retain its bullish bias in the broad market and helped move above 1.29 handle, further sharp upside move was prevented owing to increased demand that US Greenback yesterday.

IMF Growth Forecast Update Underpinned USD Bulls Limiting GBP’s Upside Move

US dollar bulls saw some level of positive action as International Monetary Fund (IMF) reduced its global growth forecast for 2019 for the second time in the last six months. Global growth worries combined with increasing uncertainties surrounding Brexit proceedings underpin demand for USD in the broad market yesterday. As of writing this article, GBPUSD pair is trading at 1.2877 down by 0.10% on the day. The vote in UK parliament later this month is a major hurdle for Brexit proceedings as headlines hint at a possible move by Labor party leader Jeremy Corbyn that will give MP’s the power to decide the fate of Brexit. Having met with strong resistance above 1.29 handle, the pair eased slightly from previous session gains and is trading steadily above mid 1.28 handle ahead of today’s London market hours.

In immediate future, investors focus is on today’s macro data outcome that will decide short term outlook of GBP in the broad market. On release front today, UK market will see the release of Unemployment Rate, Employment Change, Claimant Count Change, and Average Earnings Index + Bonus data. A positive outcome in UK’s macro data will solidify GBP’s foothold above 1.28 handle while dovish outcome will result in British Pound seeing some downside action. Meanwhile US market will see the release of Existing home sales data for December 2018 but it is unlikely to have any major impact on price action as Brexit headlines remain the main driving force behind the pair’s price momentum.