GBP/USD Forecast March 18-22 – Pound Soars After Parliament Rejects No-Deal Brexit

GBP/USD posted huge gains last week, climbing 2.2 percent. It promises to be a busy week. The U.K. releases CPI and retail sales, and parliament will hold another vote over Brexit. Central banks will also be in focus, with the BoE and Federal Reserve expected to maintain the benchmark rate.Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.

There was a flurry of votes in parliament last week, capping what was an extraordinary week in British politics. Lawmakers rejected the government’s withdrawal bill, called for a hard Brexit to be removed as an option, and voted in favor of delaying Britain’s departure from the European Union. The pound jumped as markets were pleased that the no-deal scenario is hopefully off the table. Still, plenty of uncertainty remains. Will the E.U. accept an extension? If so, for how long? Parliament remains deeply divided, and with Prime Minister May’s standing badly battered, it’s unclear how Brexit will unfold.

Overshadowed by the Brexit drama, the U.K. posted some strong numbers. The monthly GDP release rebounded in January, with a strong gain of 0.5%. As well, manufacturing production climbed 0.8% in January, after three straight declines.

GBP/USD daily graph with resistance and support lines on it. Click to enlarge:

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