The GBP/USD currency pair appears to be holding firm just above the 1.3050 level after the Uk Parliament’s recent round of indicative votes. The pair had edged downwards towards the end of last week but rebounded momentarily on Monday to recoup some of the losses. The current pullback pegged the Sterling and US Dollar exchange rate at around the 1.3050/60 range and this appears to be setting the pair for a short-term consolidation.
GBP/USD Fundamentals Overview
The GBP/USD pair is trading at the backend of a period when the Uk Parliament rejected all four proposed Brexit deals, just 10 days into Brexit day. This means that unless PM Theresa May, set to convene her cabinet today can come up with a deal agreeable to the UK Parliament, the Brexit deadline will trigger the legally binding no-Brexit deal as the Uk separates from the EU block.
On the other hand, traders will also be looking forward to the release of the UK construction PMI, which will be followed by the US durable goods orders data later. This could create some interesting trading opportunities for both the bulls and the bears.
GBP/USD Technical Analysis (the 240-min Chart)
From a technical perspective, the 240-min chart indicates that the GBP/USD currency pair has been trading on an ascending wedge for the most part of the last four months but recently appears to be flattening around the 1.3000 to 1.3300 range, which suggests that there could be an imminent trend reversal forming.
As such, the bulls will look to target profit opportunities at around the 1.3130 level while the bears will look to pounce for potential movements downwards towards the 1.2980 level as demonstrated on the chart.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the GBP/USD currency pair appears to have recently bounced off the lower level 50% of the median line in Andrews’ pitchfork. The pair seems tightly pegged within the two lines in a bullish pitchfork and this again could be indicative of slowing bullish momentum.
The RSI also supports this case of a low bullish momentum as it currently hugs around the 50 points level. Both the bulls and the bears will be looking to explore the multiple opportunities created by the current scenario in the intermediate time frame and long-term.
In summary, as the Brexit day approaches, the GBP/USD currency pair will remain relatively timid unless something unexpected like a softer Brexit deal comes through. The next two weeks will present some interesting opportunities for traders but profits might not be much.