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Market Overview

GBP/USD Forecast: Sterling Remains Dormant in 1.2600-1.2700 Range

  • The GBP/USD is trading in a sideways trend capped in a tight trading range of 1.2600-1.2700.
  • The GBP/USD was unable to materialize the US Dollar softness on fears of US government shutdown.
  • The UK Labor party leader Jeremy Corbyn repeated his readiness to call for early elections saying it is the question of when not if.

​​​​​The GBP/USD is trading little changed on the downside at around 1.2640 with currency market moves limited with traders taking vacations amid holiday season. There is a lack of economic data and Brexit-related headlines, the range-bound trading is expected to prevail throughout the week with trading activity resuming in the upcoming week after New Year’s Day holiday. 

The economic calendar in the US is set to deliver Chicago Fed index that is expected to deteriorate while major topic remains the US government funding that keeps US Dollar under pressure.

In the UK politics, no major Brexit-related headlines were published between Christmas and the New Year's Eve with only news from the UK opposition Labor party leader Jeremy Corbyn that reiterated his readiness to vote for early elections.

Technically, the GBP/USD is still moving sideways within a downward sloping trend while the currency pair remained capped in a one big figure trading range of 1.2660-1.2700 on a 1-hour chart. The technical oscillators including Momentum and the Relative Strength Index both dwell in the neutral territory. The Slow Stochastics made a bearish crossover just below the overbought territory. The holiday-thinned session is expected to see GBP/USD range-bound within 1.2600-1.2700.

GBP/USD 1-hour chart



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Posted-In: Brexit FXStreet GBP/USD government shutdownGovernment News Global Markets

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