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GBP/USD Price Forecast – Sterling Fails to Gain Momentum despite Hawkish Macro Data

Colin First

The GBP/USD is shifting lower ahead of the upcoming London market session and the pair is moving near 1.3370 after a volatile Tuesday window that saw the pair set familiar lows near 1.3340 and back over the 1.3400 handle before settling back roughly where it started. When looking into Brexit developments, Theresa May avoided a massive potential blow to her Brexit strategy when MPs turned down a plan that would have given parliament a veto on the final deal negotiated with Brussels but giving parliament greater say in any Brexit deal.  MPs voted to reverse the Lords amendment removing the exit day from the bill meaning that 29 March 2019 is again the exit day after the government made “lots” of concessions according to a parliamentary source.

GBPUSD Still in Range

The U.K. House of Commons votes 324 to 298 to reject amendment to the Brexit bill. Meanwhile recent price action raises the risk for a further decline in GBP/USD as the exchange rate carves a bearish series. While US-N.Korean Summit played a major role in US Greenback growing strong during yesterday’s trading session, investors of British Pound turned the focus from summit proceedings to UK’s Brexit proceedings and US CPI data by mid London session as the pair began its decline. As Greenback continued to grow strong in late North American market hours supported by positive US macro data, investors began focusing on today’s US PPI data and FOMC update, traders and analysts took to cautious stance as US dollar looks to continue moving uptrend with positive forecasts for both FOMC rate decision and US macro data outcome today.

GBPUSD Hourly

Meanwhile UK’s calendar is also set to see high level of activity during today’s London hours as would see release of CPI, RPI & PPI Input/output data on monthly and yearly basis. Technically, the pair is still unable to post a bullish stance, barely above a bearish 20 SMA and with technical indicators heading higher within neutral levels without enough strength. The pair would actually need to break above the 1.3450 region to gather additional momentum and extend its advance. The downside, on the other hand, seems better limited at the time being.  Expected support and resistance for the pair are at 1.3340 / 1.3300 / 1.3270 and 1.3395 / 1.3435 / 1.3475 respectively.

This article was originally posted on FX Empire

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