GBP/USD Monthly Fundamental Forecast – October 2016

The monthly chart of GBPUSD presents an interesting picture. The last 3 months following the Brexit, including the month of September, have had higher lows and they represent a U shaped pattern which is normally considered a bullish pattern. Couple this fact with the actual news and data being released from the UK lately (all post-Brexit data) which show that the situation in the UK isnt as dire as it was made out to be, and we have a situation where we could be looking at a strong cable in the month of October and November as well.

Though the pair had a dull second half of September, the first half had been interesting and volatile. It was during the first half that we saw a lot of data being released from the UK and they pointed to the fact that the situation in the UK wasnt as bad post-Brexit as was expected, though the details and the timing of the actual exit are still being worked out. This made the pair rise to 1.34 after which the FOMC rut set in and the pair parachuted down back to the support at 1.3000 where it continued to plod during the second half of the month. The demand for EURGBP which usually surfaces during the last few days fof every month didnt help matters and this made the pair continue in its dull range.