GBP/USD Forecast: Sterling Stuck To 1.2800 As Trade War Truce Slaps US Dollar

• The GBP/USD is trading on the upside after the US and China signed temporary trade war truce agreement and Risk-on mood saw US Dollar retreating lower.
• The UK manufacturing PMI rose unexpectedly strongly to 53.1 in November, up from 51.1 in the previous month but had no market impact.
• The UK parliament is expected to vote on Prime Minister Theresa May’s Brexit deal on December 11 with the debate starting on December 5.

The GBP/USD is trading on the upside at around 1.2780 after the weekend G-20 summit saw the US President Trump making a temporary 90-day trade war truce with China’s President Xi Jinping. The trade war agreement supported the Risk-on sentiment with global stock rallying and the US Dollar broadly retreating lower. 

The GBP/USD was unable to withhold the 1.2820 daily high and retreated below 1.2800 level as the fundamentals are playing a secondary role in the game of chicken ahead of the UK parliament voting on Brexit deal Theresa May made on Movember 26 with the European Union officials at the Brexit summit. The UK parliament will vote on Brexit deal on December 11 with the parliamentary debate starting on December 5.

Meanwhile, the UK manufacturing PMI improved in November to 53.1 from the October reading of 51.1. The UK manufacturing PMI data had no market impact on Sterling. 

Technically the GBP/USD is moving in a downward sloping trend on the hourly chart. The technical oscillators including Momentum and the Relative Strength Index are both pointing lower as they stand in the neutral territory. The Slow Stochastics is in the overbought territory and it has already made a bearish crossover indicating the price of GBP/USD falling lower. The GBP/USD is expected to move around 1.2800 level with price movement tilted to the downside testing 1.2735 first before testing the round big figure of 1.2700. 

GBP/USD 1-hour chart