GBP/USD Daily Fundamental Forecast – October 19, 2017

The GBPUSD pair has been moving steadily higher on the back of some dollar weakness across the board over the last 24 hours. There has not been any fundamental news, as far as we can see, that has brought in the weakness in the dollar but with us being in the second half of the month, when the news across the world dries up pretty much, we believe that the focus is more on the flows and the positioning in general rather than any fundamentals that are driving the market.

GBPUSD Moves Higher

We have had reports that have been asking the UK PM May to quit the Brexit talks if the trade deals are not done. This has been an ongoing theme over the past few weeks as far as the Brexit talks are concerned. There have been little progress in the talks so far and in a show of strength and the fact that they are getting to the business end of the talks, the UK PM May has herself gone to Brussels to continue the talks and hammer out a resolution.

The calls for a no deal and for her to walk out of the talks are seen more as posturing rather than anything else at this point of time. We believe that the UK has little choice but to hammer out some decent deal that does justice to both the UK and the Eurozone as well and though there seems to be some block at the moment, we believe that the talks will eventually progress in due course of time which should be positive for the pound.

Looking ahead to the rest of the day, we have the retail sales data from the UK and the unemployment claims data from the US. The retail sales data should bring in some volatility in this pair for today and considering that the incoming data from the UK have been weak over the last few weeks, the market would be looking out closely for this piece of data which is likely to determine the direction of the pound for the rest of the week.