GBP/USD Forecast: Sterling In A Sideways Trend Near 7-Week Low

• The GBP/USD is trading little changed above 1.2800 after falling to the 7-week low of 1.2795 on Thursday.
• The rumors of deep division within Theresa May’s Cabinet and Brexit negotiating team surfaced.
• The GBP/USD is set to suffer further fall should the US third-quarter GDP surprise on the upside.

The GBP/USD is trading little changed around 1.2820 after falling to fresh October low and the lowest level in the last 7-weeks at 1.2796 on Thursday. The GBP/USD met the last two price targets breaking 1.2920 first before reaching 1.2790 as the Brexit uncertainty weighs on currency.

With the release of the first estimate of the US third-quarter GDP due later on Friday, the GBP/USD might come under further pressure as the growth divergence resurfaces. Amid lack of fundamental data in the UK it is the Brexit headlines driving Sterling lower.

Earlier this week, British media reported that the UK Prime Minister Theresa May is losing control over her own Cabinet and that the division among her team members rises. 

The GBP/USD is moving in a downward sloping trend framed by last week’s high of 1.3238 and Monday’s high of 1.3091. After falling sharply on Monday towards 1.2940, the GBP/USD recovered on Brexit optimism on Tuesday just to fall back to October lows on Wednesday and fell further down on Thursday. While moving sidelines on Friday, the technical oscillators including Momentum, the Relative Strength Index both turned higher from near oversold territory on a 1-hour chart. The Slow Stochastics made a bullish swing higher in the oversold territory indicating a current sideways trend to prevail. After the GBP/USD fell past price target of 1.2920 and fell below 1.2800 nearing September 2018 low. With strong US GDP figures exceeding the market estimate of 3.3 percent rise, the pressure on falling further towards 2018 low of 1.2662 will mount. 

GBP/USD 1-hour chart