GBP/USD Forecast: Holds steady near mid-1.3000s, awaits BoE for fresh impetus

The GBP/USD pair witnessed some good two-way moves on the first day of a new trading week and finally ended the day in the red for the third consecutive session. The pair did find some support near 50-day SMA and managed to gain some positive traction during the early European session, albeit struggled to capitalize on the attempted intraday positive move beyond the 1.3100 round-figure mark. The uncertainty surrounding the BoE decision, scheduled later this week, turned out to be one of the key factors that held investors from placing any aggressive bets and led to the range-bound price action.

Moreover, concerns that Britain might crash out of the European Union further held the GBP bulls on the defensive. Market worries were further fueled by the EU chief Brexit negotiator Michel Barnier's warning that there is still the risk of a cliff-edge Brexit at the end of 2020. This coupled with the prevailing risk-off environment, amid fears about the outbreak of the deadly coronavirus, benefitted the US dollar's perceived safe-haven status and collaborated to the pair's weaker tone. Meanwhile, the global flight to safety led to an intraday slump in the US Treasury bond yields, which kept a lid on any further USD appreciating move and helped limit deeper losses.

The pair held steady near mid-1.3000s through the Asian session on Tuesday. In the absence of any major market-moving economic releases from the UK, the incoming Brexit-related headlines might play a key role in influencing the sentiment surrounding the sterling. Later during the early North-American session, the release of the US Durable Goods Orders data, followed by the Conference Board's Consumer Confidence index might further contribute towards producing some meaningful trading opportunities. The key focus, however, will remain on the latest monetary policy update by the FOMC on Wednesday and the highly anticipated BoE decision on Thursday.

Short-term technical outlook

From a technical perspective, some follow-through selling now seems to accelerate the slide further towards the key 1.30 psychological mark. The mentioned handle nears a short-term ascending trend-line, extending from early November lows through December/January monthly lows, which should act as a key pivotal point for short-term traders. A sustained break through might be seen as a key trigger for bearish traders and set the stage for a further near-term depreciating move towards the 1.2900 round-figure mark.

On the flip side, the 1.3100 level now seems to have emerged as immediate resistance and any subsequent momentum might now confront some fresh supply near the 1.3135-40 region. This is followed by resistance near the 1.3170 region, which if cleared decisively might negate the bearish outlook and assist the pair to aim towards reclaiming 1.3200 round-figure mark.