GBP/USD Weekly Fundamental Analysis, November 23 – November 27, 2015 Forecast

Weekly Analysis and Recommendations:  The GBP/USD posted a two-sided trade last week before finishing lower. For the week, it ended at 1.5188, down 0.0046, or .30%.

The Forex pair actually reached its low for the week at 1.5154 after the release of the U.K.’s latest consumer inflation report. The U.K.’s inflation rate as measured by the Consumer Prices Index remained at -0.1% in October, according to the Office for National Statistics. The news dampened expectations of a rise in interest rates any time soon. Earlier in the month, the Bank of England said that rates would not rise until well into next year. In its latest quarterly Inflation Report, released a couple of weeks ago, the BoE said that inflation was unlikely to rise to 1% until the second half of next year, while it would be two years before it reached its 2% target.

The GBP/USD was further supported at mid-week, following the release of the Fed minutes. Traders aren’t worried about the December rate hike, that’s a given. But they are concerned about the timing of future rate hikes and the Fed’s use of the term “gradual”. This news isn’t strong enough to change the main trend to up, but it could underpin the market while traders make position adjustments.

This week features the U.S. Preliminary GDP report on Tuesday, and the U.K. Autumn Forecast Statement and U.S. Durable Goods on Wednesday. The week ends with the release of the U.K. Second Estimate GDP report.

Volume is expected to be below average because this is a U.S. holiday week. Some traders may try to take advantage of the thin trading conditions so watch for a few volatile moves. Over the short-run, we could be looking at a two-sided trade, but because of the divergences between the monetary policies of the Bank of England and the U.S. Federal Reserve, the GDP/USD is expected to weaken.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Important Reports to Watch This Week:

         Date                   Time        Curr                             Event                                                                             Forecast  Previous