GBP/USD Fundamental Analysis – week of May 1, 2017

The GBPUSD is approaching a crucial mark as the prices move towards the 1.30 region. This region is very important psychologically and technically as well but with the kind of momentum that is behind the pair at this point of time, it looks only a matter of time before the pair breaks through the 1.30 region and pushes through to its next target which is likely to be 1.34. The coming week would be an important one to determine whether this bullish leg continues or whether this is just a retrace of the larger downtrend.

Pound Off to a Flier

The pound had been buoyed over the last couple of weeks on the news that the UK PM May has called for an election in June in a measure that is seen as one to strengthen her position domestically and internationally. This bold move has been welcomed by the markets and seen as something that is positive for the UK economy and this is the reason why the GBPUSD has been steadily rising over the last couple of weeks.

Last week, we also got the news that a opinion poll in Scotland showed that people do not prefer another referendum for Independence and this is another shot in the arm for the UK government. The dollar has also been generally weak across the board in general, despite the major tax cuts that have been announced by Trump over the last week. A combination of these factors have helped to keep the GBPUSD pair under the strong control of the bulls and it managed to close the week in the 1.2950 and looks very strong for the coming week.

But the upcoming week has loads of economic events in store in the form of the FOMC, NFP and Yellen speech and with the focus now shifting to whether the Fed would hike rates in June or not, these events are likely to be watched very closely. if the Fed drops enough hints of a June rate hike, we can see some correction in the GBPUSD pair towards the 1.2650 region in the coming week.