GBP/USD Daily Fundamental Forecast – October 25, 2016

GBPUSD managed to stand its ground yesterday despite some harsh headlines focussing on the UK and the Brexit process. The pair continued to consolidate for the whole of yesterday and today morning and it had an especially low volatility day yesterday when the entire daily range was only 68 pips. This is a big surprise for this pair especially which has been highly volatile for the past few weeks. And this happened despite some big headlines dominating the euro session.

The UK PM May agreed that there will be several debates in the Parliament regarding the Brexit process, its timelines and the way to go about the whole process as such indicating that she is willing to hear the opinion of a variety of members before she sits at the negotiating table with the euro leaders when the actual process begins next year. She also indicated that the UK leaders would be making an effort to make the Brexit process as smooth and soft as possible for all stakeholders so that the UK would be able to avoid the economic downturn which so many investors and economists expect. This comes amidst the statement from the Scottish First Minister that they might still go in for a referendum on the Brexit process if the process proved to be a hard landing. Users will remember that the Scottish region had voted to stay with Europe but had been outvoted by the people in the mainland and hence their natural wish would be to choose to go their own path rather than go for a hard Brexit process and bring upon themselves something that they didnt ask for.

Looking ahead to today, we do not have any major news releasing from the UK for today though we have BOE Governor Carney speaking later on in the day during the US session. We do not expect much volatility today as well as the market waits for the release of the UK GDP this week and we expect some more range trading for the day.

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