The GBPUSD pair continues to trade in a strong manner despite the strength of the dollar beginning to show through. This has since pushed the pair below the 1.35 region but we believe that this is just a small correction in the larger bullish phase of the pound and it should soon be overcome and the pair should start moving higher pretty soon.
GBPUSD Powers Higher
The anticipation has been growing with regards to the announcement of a deal in the Brexit talks. There have been reports that a deal has been reached at the talks and it would be revealed in a week or two and the market has been pricing in the same. This is extremely positive news for the pound as long as the UK gets what it wants out of the deal. One of the main things that the UK would want is free access to the Eurozone trade zones and if this happens, which is likely to be given at a cost, then we should see the pound get strengthened further.
The market always overruns the news and thats what we have been seeing over the last few days as the traders have been buying the pound in anticipation of the announcement of the deal. The incoming data has been generally steady from the UK and with more data from the US and the UK during the course of the week, we should not be short of volatility in the pair.
Looking ahead to the rest of the day, we have the manufacturing PMI data from the UK but we dont have any data from the US. But the focus would be on the tax reform bill that is progressing through the Senate in a slow and steady manner and also on the developments over the Flynn issue in the US. All these are likely to dominate the headlines for today.
This article was originally posted on FX Empire