GBP/USD Fundamental Analysis – week of March 12, 2018
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The GBPUSD pair had a very tight and rangy week but the bulls should be encouraged by the fact that the pair managed to close the week above the 1.38 support region which now opens up the possibility of the pair moving towards the 1.40 region if the pound bulls are able to maintain the momentum in the short term.
GBPUSD Stays Steady
It was a week of tight trading in the pair as the data from both the US and the UK seemed to have little impact on the pair. The dollar was on the backfoot during the early part of the week due to the fears and confusion surrounding the tariff plan from the US and this helped the pair to climb above the 1.38 region. But as the week wore on and the tariff plan came to be signed off with a lot of watering down and exemptions and with the employment data also coming in in a strong manner, the dollar managed to gain in strength.
But this dollar strength seemed to have little impact on the pair as it continued to trade in a strong manner and managed to stay above the support region. It remains to be seen whether the pound bulls would be able to keep this momentum going on in the short term as the pound has been unusually quiet and it seems to be lost for direction in the short term.
In the coming week, we have the inflation and retail sales data from the US but with the strong data last week, the rate hike in March is more or less confirmed and the market would now be focussing on more strength in the coming data as it would help them to keep alive their hopes of more than 3 rate hikes from the Fed this year. If the incoming data continues to be strong, then we are likely to see further strength in the dollar and then the pound bulls would find it difficult to push higher. We also have the annual budget from the UK and this could also have an impact on the pound and bring in some volatility.
This article was originally posted on FX Empire