GBP/USD Forecast: Hammond Joins The War Of Words Over The Brexit Deal With Sterling Stagnant

• The UK Chancellor of Exchequer Phillip Hammond joined the debate before the Brexit deal parliamentary vote saying this is the best plan available.
• The GBP/USD is stuck to mid 1.2700s, just of November 15 lows.
• The GBP/USD trades close to the lower boundary of the broader range ahead of December 11 parliamentary vote on Brexit deal.

The GBP/USD is trading little changed on the upside at around 1.2750, just off the lowest level since November 15, as the public debate heats up before the UK parliament is expected to vote on the Brexit deal approved by the European Union officials and the UK Prime Minister Theresa May over the weekend in Brussels. 

The UK Chancellor of Exchequer Phillip Hammond joined the debate saying fro BBC that Theresa May’s Brexit plan is the only one available. “This is the only plan available for a negotiated exit from the EU that will allow us to deliver Brexit in accordance with the referendum decision and protect our economy,” Hammond said on Tuesday adding that this is the best plan available. Hammond also presented the UK government’s estimation of the UK economic development after Brexit saying the UK GDP will be between 1 and 2 percent lower over 15 years than if it stayed in the EU, compared with 7.5 percent lower under a no-deal situation.

The focus is now on a campaign of the UK Prime Minister Theresa May in her effort to have her Brexit deal approved by the UK parliament. The UK’s House of Commons will vote on the Brexit agreement on Tuesday, December 11 with five days of the debate starting on December 4. 

The UK House of Commons either approves the Brexit agreement and allows the government to pass the subsequent Brexit legislation enabling orderly Brexit, or fails to approve the deal and the disorderly Brexit or no-deal Brexit will follow. According to estimates, Theresa May has a support of 226 Conservative party loyalists and will need to find another 94 members of parliament to get the Brexit deal passed.

The GBP/USD is moving in a downward sloping trend on a 1-hour chart with the technical indicators like Momentum and the Relative Strength Index in the neutral territory. The short-term cap is at the current level of mid 1.2700s with the further potential of sliding lower to 1.2700 first before targeting the cyclical bottom of 1.2662. Before the UK parliament passes the Brexit agreement, chances are for the uncertainty to prevail keeping Sterling under pressure. 

GBP/USD 1-hour chart