GBP/USD Fundamental Analysis – week of August 14, 2017

In a way, it was an important week for the GBPUSD pair as it broke through the crucial 1.3030 region during the week and the bulls were not able to make a recovery beyond this again during the course of the week. But what should encourage the bulls in the pound is the fact that the pair closed the week pretty strongly on the back of dollar weakness and this is something that they will be looking to carry forward for the upcoming week.

GBPUSD Likely to Stay Weak

Last week, the markets were rocked by all the geopolitical tension that came in due to the trading of charges by North Korea and the US. The mornings and the evenings of almost every trading day in the week were dominated by statements from North Korea and answers and counter threats to them by Trump. This led to a lot of choppy action in the markets and this also helped the dollar in way as it staged a mini recovery during the first half of the week. This pushed the pair below the 1.3030 region from which it never recovered.

Though the pair did make many attempts to gain back the region, the bulls were never able to achieve that. Even some strong data in the form of strong manufacturing production was not enough for the pair to push through 1.3030 and the situation looked bleak. But the weak CPI data from the US on Friday helped the pair to close the week above 1.3000 and this should encourage the bulls.

In the upcoming week, we have the CPI data from the UK which will give an indication of how well the economy is doing. We also have the retail sales data and the FOMC meeting minutes from the US and these are likely to bring in some volatility. We expect the dollar to continue to trade weakly in the coming week which gives a chance for the GBPUSD pair to push through towards the range highs above 1.32.