GBP/USD Forecast: Oscillates within a familiar trading range ahead of Tuesday’s key Brexit vote

The GBP/USD pair came under some renewed selling pressure on Friday and ended with modest losses for the fifth consecutive week. Rumours that the UK Cabinet discussed the possibility of a second referendum or a softer Brexit if May's plan doesn't pass through the Parliament also did little to provide any meaningful impetus and assist the pair to register any meaningful recovery from yearly lows, set last Tuesday.

The downside, however, remained cushioned amid some renewed US Dollar selling on the back of softer-than-expected monthly jobs report, showing that the economy added only 155K new jobs in November. This coupled with some dovish Fed speak added to the recent speculation over a possible pause in the Fed rate hike cycle in 2019 exerted some additional downward pressure on the greenback. 

The pair did open with a minor bearish gap but once again managed to attract some fresh buying near the 1.2700 handle ahead of busy UK macroeconomic calendar at the start of a new trading week, featuring the release of manufacturing/industrial production data and the UK monthly GDP growth figures for October. 

Any reaction to a meaningful deviation from the media market expectations is likely to remain limited as investors might continue to refrain from placing any aggressive bets ahead of the crucial Parliamentary vote on the UK PM Theresa May’s negotiated deal, scheduled on Tuesday.

From a technical perspective, a short-term descending trend-line resistance has been capping any attempted up-moves over three-weeks or so and might continue to act as a key near-term hurdle at the start of a new trading week. A convincing breakthrough the mentioned barrier, currently near the 1.2785 region, leading to a sustained move beyond the 1.2800 handle might trigger a short-covering bounce move towards the 1.2835-40 region. A follow-through positive momentum has the potential to continue lifting the pair further toward its next major hurdle near the 1.2880 supply zone. 

On the flip side, the 1.2700 handle now seems to have emerged as an immediate strong support, which if broken is likely to accelerate the fall back towards challenging yearly lows, around the 1.2660 region, before the pair eventually aims to test the 1.2600 round figure mark.