GBP/USD Forecast: Rising odds for a break below 1.2000

Price action in GBP/USD keeps pointing to extra losses.
Brexit limbo and likeliness of ‘no deal’ weigh on the Sterling.
BoE remains in a ‘wait-and-see’ mode.

Pablo Piovano FXStreet

The Sterling remains mired within the negative territory so far today and appears that a break below the psychological support at 1.20 the figure is just around the corner.

In the meantime, the outlook on the British Pound is expected to remain gloomy to say the least, always on the back of rising uncertainty stemming from the UK government and utter absence of progress towards an outcome other than a ‘no deal’ scenario in the Brexit negotiations.

In addition, the Bank of England remains vigilant on both data and Brexit developments, although without giving markets any hint of its probable moves in the next months.

If the selling impetus accelerates (most likely scenario) and 1.20 gives way, Cable should then face the 2017 low at 1.1985 will be the next immediate target ahead of the ‘flash crash’ (October 2016) in the 1.1900 neighbourhood. On the unlikely event of a serious move higher, the 21-day SMA at 1.2234 emerges at the interim hurdle.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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