Sunday, October 22, 2017 2:54 AM EDT
Fundamental Forecast for GBP: Neutral
We remain neutral on GBP but would likely turn short-term bullish if the recent cessation of EU/UK hostilities remains in place.
Thursday’s EU Summit leaders meeting saw a slight change in tone in the war of words between the EU and the UK, most notably over the ‘divorce bill’ with the EU saying that while insufficient progress had been made so far to move on to trade talks, they would begin ‘internal preparation’ for the second round. Markets took this as a positive message from the EU that a potentially damaging ‘no deal’ was gradually being removed from the negotiating table. While negotiations are still expected to prolonged and potentially fractious, this move is giving GBP an upwards boost.
Markets are also looking forward to the next Bank of England policy announcement on November 2 with expectations running high of a 0.25% interest rate hike. Next week’s final 3Q y/y GDP release is expected to show growth of 1.5%, but any downgrade of GDP, coupled with this week’s 3% inflation print may stay the BOE’s hand in hiking rates until the December meeting.
Chart: EUR/GBP Daily Time Frame (May – October 20, 2017)
On the above EUR/GBP chart there is fibonacci support at 0.8927 ahead of 0.8810 while any GBP weakness could see an attempt at 0.9072.
Chart by IG
Disclosure: DailyFX, the free news and research website of leading forex and CFD broker FXCM, delivers up-to-date analysis of the ...
more
Disclosure: DailyFX, the free news and research website of leading forex and CFD broker FXCM, delivers up-to-date analysis of the fundamental and technical influences driving the currency and commodity markets. With nine internationally-based analysts publishing over 30 articles and producing 5 video news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to one of the most powerful economic calendars available on the web, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who heavily rely on the news for their trading strategies. Additionally, DailyFX serves as a portal to one the most vibrant online discussion forums in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk about serious trading.
Any opinions, news, research, analyses, prices, or other information contained on dailyfx.com are provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
less
How did you like this article? Let us know so we can better customize your reading experience.
