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  • Investors preferred to remain on the sidelines ahead of Brexit deal votes.
  • A subdued USD price action does little to provide any meaningful impetus.

The GBP/USD pair lacked any firm directional bias on Tuesday and seesawed between tepid gains/minor losses through the mid-European session.
Following the recent upsurge to over five-month tops, the pair now seems to have entered a bullish consolidation phase and remained confined in a narrow trading band around mid-1.2900s ahead of a second reading of the UK Prime Minister Boris Johnson’s Brexit deal.

Focus remains on Brexit developments

Johnson will find out whether lawmakers are willing to back his plan and if passed, will be followed by a debate on the voting program. The government must win to proceed to the next stage of legislation and to get the Brexit done by October 31.
Nevertheless, the first vote, scheduled at 18:00 GMT, will play a key role in infusing a fresh bout of volatility across the GBP crosses. Given that chances for the approval of the Withdrawal Act Bill (WAB) have been improving, any pullback might still be seen as an opportunity to initiate some fresh bullish positions.
With the incoming Brexit-related headlines turning out to be an exclusive driver of the sentiment surrounding the Sterling, the price action seemed rather unaffected by a subdued US Dollar demand. Meanwhile, bullish traders are likely to wait for a sustained move beyond the key 1.30 psychological mark before positioning for any further near-term appreciating move.

Technical levels to watch