GBP/USD Fundamental Analysis – week of November 13, 2017

The GBPUSD pair moved steadily higher during the course of the week and closed the week near the highs of its range which sets it up very well for the coming week as far as the bulls are concerned. Apart from that, it was a week of low volatility in the markets with not much of fundamental drivers around in the form of news or economic events and this made the market very choppy during the course of the week.

GBPUSD Moves Steadily Higher

For much of the week, the GBPUSD pair was chopping on either side of 1.31 with no specific direction as the weakness in the pound and the dollar alternated with each other making itvery difficult for the traders to choose a specific direction for their trades. The London fix on every day also led to a lot of volatility and choppiness and this added to the woes of the traders. The Brexit process continues as the talks are in a stage of stalemate with not much of progress. This has added some pressure on the pound but so far, the impact has been limited.

The only event of note in the US over the last week was the implementation of the tax reform bill and after various rumors, it emerged that the tax cut for the corporates would be delayed by a year. This was viewed as a setback for corporates and this led to the US stock indices dropping and pressure being added on the dollar which helped the GBPUSD pair to climb through the 1.32 region for a brief while on Friday before closing the week slightly below that.

Looking ahead to the coming week, we have speeches from the BOE Governor Carney and the Fed Chief Yellen. We also have the CPI and retail sales data from the UK and the PPI and retail sales data from the US as well. As can be seen, there are loads of events and data in the coming week which should hopefully help the market to break out of the volatility rut that it seems to be in over the past couple of weeks. The market would be looking for hints of the rate hike from the Fed in December and if enough hints are dropped, then we could see the dollar gain in strength in the coming week which should help erase the move up that we have seen over the last week in the GBPUSD pair.