GBP/USD Fundamental Analysis – week of September 26, 2016 – Forecast

Like the EURUSD, the GBPUSD pair is also caught in a range but the range is double the size of the range in EURUSD and thats why it appears as if this pair is much more volatile than the Euro. This range has set in since the Brexit verdict and its been 1.29 and 1.34 and this range is more a consolidation of the price as the market waits to ascertain the true value of the pound post-Brexit. The process of Brexit hasnt yet officially begun and the modalities and the details are yet to be worked out and this is an uncertainty that is weighing on the pound.

The data that has come out of the UK ever since the Brexit verdict have all been better than expectations and this gives confidence in the economy but without the details of the process, its difficult to understand the full and true impact of the same. The weekly chart of this pair, as is usual with charts of such long term, shows us the range very clearly and the traders and investors would be safe as long as they trade the extremes of the range. For those who cant afford to wait for the range extremes, they can take trades with SL beyond the extremes and adjust their lot sizes and returns accordingly.

In the coming week, the only major news out of the UK is the current account that is scheduled to be released on Sep 30. There are also some major news out of the US in the upcoming week but we believe that these would not be enough to break the GBPUSD out of the range. With the price now close to the bottom of the range, it may be a good idea to take a long right now with a SL beyond the range bottom. We believe that the upcoming week would see the pair move up and the first major resistance would be 1.3150. Any clear break of this region could open up 1.3300 and then 1.3400. Trade well and Trade Safe !