GBP/USD Fundamental Analysis October 21, 2013 Forecast

Analysis and Recommendations:

The GBP/USD continues to defy gravity climbing to 1.6188 and looking to break its recent highs in the 1.62 range. The pound gained 25 pips today. The economy has steadily seen positive data to show a stronger recovery. Earlier in the month a few reports missed expectations and sent the pound tumbling after the prior months data showing a clear recovery. Now with jobs data and retail a sale printing above expectations the currency is rebounding strongly against a weak US dollar. Like a well-executed U-turn, positive sentiment towards Sterling returned yesterday as British Retail Sales printed strongly at 0.6% for September. Over the past two weeks Sterling has struggled to maintain its summer momentum due to a blip of below forecast economic readings in Manufacturing and Construction. However, yesterday’s private consumption release, which brought the year-on-year Retail Sales figure to a stronger-than-anticipated score of 2.2%, suggests that the burgeoning British revival likely continued to accelerate during the third quarter.

Sterling traded near a two-week high against the dollar on Friday, supported by strong British data and as the greenback fell on worries about the economic impact of the US government shutdown. The pound was up 0.1 per cent at $1.6189, having hit $1.6195 earlier – its highest level since Oct. 3. It had risen 1.3 per cent in the previous session which was its second-biggest daily gain in 2013. Further gains could see it approach the Oct. 1 mark of $1.6260 – a more than eight-month high which is acting as resistance. Strategists cautioned that sterling could lose momentum given recent the steep ascent as investors would be reluctant to buy the currency at such high levels. Also, its gains would be capped as sellers emerge at higher levels.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.    

Economic Data October 18, 2013 actual v. forecast

 

Upcoming Economic Events that affect the CHF, EUR, GBP, CAD and USD

Government Bond Auction

Date Time Country 

Oct 21 09:00 Slovakia

Oct 22 00:30 Japan

Oct 22 08:30 Spain

Oct 23 09:30 Germany

Oct 23 14:30 Sweden

Oct 23 15:30 Italy

Oct 24 11:00 Norway

Oct 24 15:00 US

Oct 24 15:30 Italy

Oct 24 17:00 US

Oct 25 15:30 Italy