The GBPUSD pair yesterday traded rangebound for the majority of yesterday’s trading session but lost ground during American market hours once US GDP data hit the market. US Greenback gained strength in the broad market as positive preliminary GDP update improved sentiment around USD and also caused a spike in US treasury yields providing Dollar’s rally with fundamental support. This caused the pair to see sharp decline which settled near mid-1.32 region where the pair traded rangebound across Asian market hours. Meanwhile, comments from UK Brexit Secretary Barclay and EU Chief Negotiator Brainer added to bearish sentiment surrounding British Pound.
Flash PMI’s Eyed For Short Term Profit Opportunities
Barclay commented that the UK parliament doesn’t seem to have a consensus on the second Brexit referendum while Brainer stated that while a delay in the deadline in possible it should be focused on resolving issues rather than just postponing the issue. Brainers comments aren’t far from the truth as the UK parliament has time and again failed to make critical decisions with PM May struggling to push a deal through while the lawmakers keeping beating around the bush failing to decide on whether to pursue the deal or make a second referendum which could likely facilitate UK citizens to choose to remain with EU. As of writing this article, the GBPUSD pair is trading at 1.3251 down by 0.35% on the day.
Moving forward today, investors focus on macro data updates and headlines on Sino-U.S. trade talks for short term profit opportunities. UK calendar sees the release of Manufacturing PMI while the US calendar sees the release of Core PCE Price index, PCE deflator, ISM Manufacturing PMI, Michigan consumer expectations and consumer sentiment data. The pair is likely to continue range bound action trapped above 1.3200 handle for rest of the day as the forecast suggests mixed outcome in the US calendar which will leave USD with a lack of strength required for the breakout. Meanwhile, overall price momentum will remain in control of Brexit headlines coming from the UK.