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GBP/USD Fundamental Analysis – week of October 17 – Forecast

By:
Colin First
Published: Oct 15, 2016, 16:48 UTC

Uncertainty continues to shroud GBPUSD as the markets and the traders and investors are clearly nervy about the pound. Its been a couple of weeks since

GBP/USD Fundamental Analysis – week of October 17 – Forecast

Uncertainty continues to shroud GBPUSD as the markets and the traders and investors are clearly nervy about the pound. Its been a couple of weeks since the UK PM May announced the timeline for the Brexit but even now, things are yet unclear and the uncertainty has been exacerbated by the seeming slanging match between the Euro and the UK leaders on how they should be going about the Brexit process. Each side wants the process to be easy for their side and difficult for the other and this lack of cohesion between the 2 sides is actually hurting both of them and especially the pound as this lack of coordination is clear for everyone to see. The market and in fact, the global economy depends on these 2 sides working closely together to make the Brexit process as smooth as possible but so far, these sides have not inspired enough confidence.

GBPUSD Weekly
GBPUSD Weekly

This has been reflected in the price of this pair which has been highly volatile for the whole of last week within a 400 pip range with the price responding to each and every comment from either side. This has proved to be a nightmare for those who are looking to pick a direction. The only clear trade seems to be to sell all rallies in this pair and this strategy would have made some good money last week.

Looking ahead to the coming week, we have a large number of economic data from the different parts of the world which will affect the pricing on this pair. We have the US CPI and the Presidential debate in the coming week. We also have the UK CPI and UK retail sales in the coming week as well. The data out of the UK in the recent weeks have been generally good and better than market expectations but as long as the risk and uncertainty surrounding the Brexit process continues, it is going to be a huge ask for the bulls to mount any kind of serious challenge to the bears who are in full control of this pair so far. We believe that the clearing up of the smokescreen will take a few weeks atleast and till then, stick to the range extremes and try to take trades with tight SL to keep your capital safe.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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