GBP/USD awaits range breakout on the UK Budget

After a choppy session witnessed a day before, the GBP/USD pair makes another attempt to break-out from the 100-pips range trade seen so far this week, with all eyes set on the UK’s Autumn Forecast Statement for the next direction.

GBP/USD awaits fresh catalyst.

Despite the sideways movement, the spot remains better bid amid a broad subdued US dollar, after the Fed Chair Yellen raised doubts over weak inflation is transitory. Also, a fresh WSJ report cited that Robert Mueller's investigators probed Kushner’s interactions with foreign leaders, extended the US political saga, weighing down on Treasury yields and the buck.    

Meanwhile, Cable also finds support from a better risk environment reflected upon by higher Asian equities and oil prices, while the latest report from FT that the EU and UK aim to strike the Brexit divorce deal within 3 weeks, and keeps the buoyant tone intact behind the GBP. 

Focus now shifts towards the UK Budget release due later on the day, with the ING FX Strategy Research noting, "The stage is set for Chancellor Hammond to showcase his vision of a post-Brexit economy in this week's Budget (Wed) and despite being hamstrung by a weaker set of OBR fiscal forecasts, it's clear that the global investment community are in dire need of some Churchillian-like words of inspiration over the future of Britain. We like GBP/USD upside and eye 1.3400 on a well-received Budget."

GBP/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet, noted: “The GBP/USD pair held above the daily descendant trend line broken late last week, but the potential upward is limited according to the 4 hours chart, as the price keeps pressuring a bullish 20 SMA, while technical indicators lost upward strength and settled near their mid-lines, directionless. Support levels: 1.3195 1.3160 1.3130. Resistance levels: 1.3260 1.3300 1.3340.”