The pound was buoyed throughout the week on the back of some progress in Brexit talks and with the incoming data from the UK also proving to be quite strong, it turned out to be a good week for the pound bulls overall. The dollar managed to hold steady during the course of the week but that had little impact on the pair as it pushed through the 1.35 region for a brief while before finishing the week, slightly lower.
Pound the Strongest
There has been some significant progress made in the Brexit talks and this progress has happened despite the domestic troubles of the UK PM May. It is likely that a deal might be reached in the talks in a week or two and some reports say that a deal has already been reached. This is good progress considering the fact that just a couple of weeks back, we were in a situation where it was said that the UK might walk out of the talks with no deal being made. This would have been bad for the pound as well as the euro and it is indeed a delight for the pound bulls that a deal is within reach.
It is expected that May might declare the details of the deal in a week or two and the fact that she has successfully pushed through a deal should strengthen her position within her party and domestically as well. This anticipation of a deal is what has been pushing the GBPUSD pair higher despite the dollar also being stronger across the board, on account of the tax reform bill that has been moving through the Senate over the last week.
Looking ahead to the upcoming week, we have the PMI data and the manufacturing data from the UK and the employment data in the form of ADP and NFP data from the US and all this should bring in a lot of volatility in the pair during the week. We expect the pound to continue to remain strong during the week though the region around 1.35 is likely to act as some strong resistance.
This article was originally posted on FX Empire
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