GBP/USD Daily Fundamental Forecast – September 25, 2017
The GBPUSD pair continues to trade in a steady manner to begin the week but we believe that we are entering a stage in this pair when it is likely to be rocked by the various pulls and pushes in several direction as far as this pair is concerned. On Friday, we had a bearish day overall as the pound was steady for most of the day but fell pretty late in the day on the back of comments from UK PM May.
GBPUSD Likely to be Choppy
The UK PM May basically added two more years to the entire Brexit schedule as she sought more time to complete the process in her speech. May and her government have handled the domestic political issues very fine so far and have steered the Brexit process to where it should be at this point of time by deftly getting it passed through the Parliament. They now enter the crucial phase of negotiations with their European counterparts and it is under such circumstances that she sought more time. This was not liked the markets which wanted to end the uncertainty around the Brexit process as soon as it was possible and hence the pair ended lower on Friday.
Today, we are getting reports of Merkel victory in Germany which could present a mixed picture as far as the pound is concerned. On the one hand, the UK will have a weaker Merkel to deal with when they sit for negotiations which should give May the upper hand. On the other hand, the coalition partner of Merkel could prove to be someone who has a much more hardline view of the Brexit process and this could make the negotiations even more difficult. But so far, the market has reacted positively as the GBPUSD pair is trading above 1.35 as of this writing.
Looking ahead to the rest of the day, we do not have any major news from the UK or the US for the rest of the day and hence, expect some choppy trading in the GBPUSD pair as the market sorts out all the news over the weekend and decides which way it wants to go.
This article was originally posted on FX Empire
