Brexit Briefing: GBP/USD Price Outlook Bullish as Votes Loom
GBP price, news and analysis:
- The GBP/USD price continues to trade with a bullish bias ahead of another crunch day for Brexit.
- The UK Parliament is expected to vote around 1800 GMT as the EU Withdrawal Agreement Bill debate begins.
GBP traders focus on Brexit Bill
The UK House of Commons is to begin debating the 115-page EU Withdrawal Agreement Bill today, with GBP/USD likely to benefit if it brings a Brexit deal closer. However, delays to the Bill would likely lead to the currency pair losing some of its recent gains.
The Brexit Bill is designed to implement the proposed deal reached between UK Prime Minister Boris Johnson and the EU. However, UK lawmakers could insist on more time to debate the proposed legislation, may propose amendments to it and could try to press for a confirmatory referendum. If so, GBP/USD will likely fall back after its recent advance.
GBP/USD Price Chart, Four-Hour Timeframe (October 8 -22, 2019)
Chart by IG (You can click on it for a larger image)
For now, the key question for traders is whether GBP/USD will break to the upside through the psychologically important 1.30 level or ease back to the recent lows around 1.2750 if it looks like the October 31 deadline for the UK to leave the EU will be called into question.
GBP/USD Sentiment data send mixed signals
Meanwhile, retail trader data show 48.83% of traders are net-long, with the ratio of traders short to long at 1.05 to 1. The number of traders net-long is 12.91% higher than yesterday and 4.88% lower from last week, while the number of traders net-short is 4.73% lower than yesterday and 33.64% higher from last week. At DailyFX, we typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a mixed GBP/USD trading bias.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.