GBP/USD Forecast: Signs of a reversal emerge after this week's key Brexit votes


Having witnessed some extreme volatility since the beginning of this week, the GBP/USD pair now seems to have stabilized a bit and has been oscillating in a narrow trading band over the past 12-hours or so. The pair remained well below nine-month tops set on Wednesday despite the fact that the UK PM Theresa May, after suffering two key defeats this week, finally got a win on Thursday, wherein the parliament voted to pass the motion to request the EU for a delay of the looming Brexit deadline on March 29. 

The lawmakers approved a short delay until June 30 if a deal is approved by March 20, which means we're headed for yet another meaningful vote next Wednesday. The key focal point for GBP traders will be on whether May will be able to gather enough support for the meaningful vote this time around. If not, a longer extension will further prolong Brexit uncertainties and trigger some choppy trading in the Sterling. 

But unless we get more clarity on the matter, the pair seems more likely to swing around within a broader trading range, though a sustained break below the 1.3200 handle might accelerate the slide further towards the 1.3165-60 support area. A subsequent weakness might negate prospects for further near-term up-move and drag the pair back towards testing the 1.3100 round figure mark en-route the 1.3070 horizontal level. On the flip side, the 1.3300 handle now becomes an immediate strong hurdle, which if conquered might push the pair back towards challenging multi-month tops, around the 1.3380 region. 

Looking at a slightly broader picture, the pair now seems to be forming a bearish rising wedge chart pattern, though will be confirmed only after a sustained break below a confluence region near the 1.30 psychological mark - comprising of the very important 200-day SMA and pattern support.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

EUR/USD chops around amid end-of-month flows, ahead of Trump

EUR/USD is battling 1.11, close to the two-month highs amid choppy trading. Hopes for a fiscal boost in Europe and mixed satisfactory data have supported the currency pair. , Sino-American tensions are rising and investors await President Trump's China announcement.

EUR/USD News

GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 

GBP/USD News

Cryptocurrencies: $348M in matured derivatives boost the market

Futures and options contracts' expiration brings a wave of volatility to the crypto market. Ethereum takes advantage and attacks resistances in the market dominance chart, Bitcoin goes back. Ripple disappoints despite regaining the third place in market capitalization.

Read more

Canada's economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

Read more

WTI drops 4% and eyes $32 mark amid risk-off, weakening demand

The selling pressure around WTI (July futures on Nymex) accelerates following the break below the 33 level, as bears now target the 32 support zone heading into the key US macro data and US President Donald Trump’s response to the Hong Kong issue.

Oil News

Forex Majors

Cryptocurrencies

Signatures