GBP/USD mixed between 'Trumptonomics' and Brexit uncertainties

With spot at 1.2345 at time of writing, GBP/USD is slightly bid within the consolidation channel on the short-term charts after last week's slide from 1.2673 recent highs. 

GBP/USD is all about politics and the Central Banks. On one hand, we have the Brexit saga continuing. The High Court recently ruling earlier this month that Parliament must vote on whether Article 50 could be invoked, while a final judgment from the Supreme Court is not expected until January. 

"We think that markets are under-pricing the risk of further BoE easing in the first half of next year, despite their recent shift to a neutral bias," argued analysts at ING, adding, "We forecast a 15bp rate cut in May on the expectation that economic data will start to deteriorate and uncertainty will remain heightened, particularly around the time when Article 50 is expected to be triggered."

On the other hand, we have 'Trumptonomics' and plenty of uncertainty to contend with, along with a toss-up between whether the greenback will remain resilient to the possible negative ramifications of high inflation, fiscal spending and the Fed pressured to hike interest rates throughout 2017. For the time being, markets take Trump and expected economic policies as a positive and the greenback remains strong and on target for the 50% fib of 2001 high and 2008 low at 101.80.

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GBP/USD levels

Technically, Valeria Bednarik, chief analyst at FXStreet explained that the risk has turned towards the downside, "As in the daily chart, the pair has closed below its 20 SMA or the first time this month, while the RSI indicator has entered bearish territory, heading south around 44," she argued, adding, "In the 4 hours chart, the price is now developing below a bearish 20 SMA, while technical indicators have corrected higher within negative territory before losing their upward strength, suggesting the pair may resume its decline towards the 1.2200 region."