Abstract:Next weeks UK data vacuum will be filled by the latest political shenanigans with rumor and counter-rumor focusing on who is up to what, with who and why.
Sterling (GBP) Price Fundamental Forecast:Neutral
Q3 2019 GBP Forecast and Top Trading Opportunities
No UK Data Next Week Will Leave Sterling Vulnerable to Rumor Risk
Sterling has nudged higher over the week, aided principally by slightly better-than-expected wages, jobs and retail sales data. UK inflation also edged higher and in a world without Brexit, these releases would have the Bank of England discussing whether the current monetary policy was appropriate or if it needed to be tightened. However, as has been the case for many, many months, Brexit is still the driver for Sterling and will remain so until October 31.
Next week there is no market moving hard UK data of note, leaving Sterling at risk of Brexit rumors and news flow. The UK market will also be holiday-thinned next week, leaving GBP potentially exposed to outsized moves in limited liquidity markets.
Brexit news flow continues unabated with the latest batch of headlines suggesting that a cross-party alliance of MPs may come together to form a national unity party if UK PM Boris Johnson loses the expected vote of no-confidence likely to be called in early September. The current Labour Party leader has said that he will act as interim PM is this succeeds ahead of an early general election with the Labour Party promising a second referendum. According to reports, four prominent remainer Conservative MPs are involved in talks with Corbyn.
Sterling technical are covered in a different section but the chart below shows a familiar pattern. Since late-April there have been three occasions when moves lower are met with a quick reversal before the overall bearish pattern takes over. Will the current move prove to be the fourth occasion?
GBPUSD Daily Chart (December 2018 - August 16, 2019)
The IG Client Sentiment Indicator shows retail traders are 75.6% net-long GBPUSD, a bearish contrarian bias. However daily and weekly changes suggest that GBPUSD prices may reverse higher.
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A week of consolidation Ahead amid renewed USD strength
GBP/USD Technical Analysis - the pair has bounced back after making a new low for the year. The Pound has seen increased volatility as it looks to hold ground. Will Sterling continue to be undermined and make fresh lows again?
The start of November has been a dwindling moment for the general major currency market. As essential economic updates flood the surface of the entire foreign exchange market, in which most of the currency pairs especially the major pairs were greatly affected by the impact of the economic releases. However, the US dollar was discovered to have held the main currency exchange performance metrics as the central economic updates from the US region tend to have determined the significant changes that have occurred in the major currency market so far.
British Pound (GBP) Price Outlook: More Losses Likely for GBP/USD