Market Overview

GBP/USD Forecast: Sterling Rangebound After May Wins A No-Confidence Vote

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  • Prime Minister Theresa May's government won a confidence vote in the House of Commons with 325 votes versus 306 clearing the way for a delayed Brexit.
  • The European Union is reportedly ready to delay withdrawal until next year.
  • The GBP/USD remains in a sideways trend in the upper part of the weekly range waiting for further Brexit headlines to set the direction.

The GBP/USD is trading little changed at around 1.2880 well anchored in a sideways trend and moving within the range of 1.2820-1.2900 since Tuesday’s Brexit deal parliamentary rejection.

The GBP/USD remains elevated after breaking from the long-term downtrend while the political deadlock persists in the UK parliament ahead of the UK officially leaving the European Union on March 29.

Deeply divided parliament rejected the Brexit deal proposed by Thresa May’s government by a humiliating margin of 230 votes on Tuesday just to support the government in a no-confidence vote on Wednesday evening with both measures implying increased chances of a delayed Brexit.

Meanwhile the reports of the European Union officials willing to extend the withdrawal period until 2020 broke out, giving British politician more time to align internally with the Brexit deal conditions that are likely to be renegotiated after the Brexit deal rejection.

Technically, the GBP/USD broke away from the downward sloping long-term trend on the upside and it is currently trading within a narrow range of 1.2820-1.2900. The GBP/USD is facing a resistance of a 100-day moving average at 1.2891 with technical oscillators including Momentum and the Relative Strength Index flat on a daily chart. The Slow Stochastics is well elevated in the Overbought territory ready to make a bearish crossover indicating spot price to fall. The GBP/USD is expected to remain capped in a sideline trend with 1.28020-1.2800 targets on the downside while a 100-day moving average at 1.2891 and 1.2900 remain targets on the upside with next hurdles at around 1.2950.

GBP/USD daily chart

gbpusd_daily_chart-636833198551235861.png

Posted-In: BrexitEarnings Government News Eurozone Forex Global Markets

 

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