Daily Market Analysis by ForexMart

March 14, 2017

Turkey’s Dispute with Netherlands Called Off its Diplomatic Ties

Turkey plans to put off diplomatic ties with the Netherlands as announced by the Dutch ambassador on Monday, escalating dispute between both countries. This was triggered after the Netherlands refused to permit Turkish Foreign Minister, Mevlüt Çavuşoğlu, to participate in the political rallies of emigrants.


Moreover, there is a tendency for the Deputy Prime Minister, Numan Kurtulmuş, to re-assess its agreement with the European Union and put on hold the migrants from Turkish territory to Europe. Kurtulmuş noted that their actions are in response to how they were treated. The Dutch government was compared to the Nazis by the Turkish President, Recep Tayyip Erdoğan, which was responded by the Dutch Prime Minister Mark Rutte to be offensive and demands an apology.

March 14, 2017
British Parliament Gives Theresa May Brexit Go Signal
British Prime Minister Theresa May is now preparing to jumpstart the actual Brexit process this coming last week of March after finally getting the approval from policymakers to begin two years’ worth of negotiations with the European Union. The British Parliament has finally passed the legislation which will enable the UK government to invoke the Lisbon Treaty’s Article 50, with the formal announcement for the Brexit expected to be announced before this month ends.

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EUR/USD Fundamental Analysis: March 15, 2017

   The USD increased in value as the market anticipates the release of the FOMC rate announcement later today. As a result, the EUR/USD consistently weakened yesterday and has managed to break through 1.0650 points and is currently situated at just above 1.0600 points. A lot of analysts have been saying that the currency pair could possibly consolidate within the 1.0600-1.0700 barrier during the week of the FOMC statement and could possibly maintain its place within the region up until the end of this week.

The expected rate hike this coming March is pretty much secured and what the market will be focusing now is the amount of hawkishness of this particular announcement, and this is where the uncertainty lies. The majority of market players have no idea on just how hawkish the statement should be in order to push the value of the dollar further. Nonetheless, the market expects that there would be some sort of clue on the Federal Reserve’s next move and if possible, hints on the next scheduled interest rate hike from the central bank. Of course, it would definitely be good news for the market if the statement outwardly gives out clues of the next rate hike, but then again the central bank is not known for such moves and could possibly state that the schedule of the subsequent rate hikes would depend on the status of various economic data in the future.

The volatility of the EUR/USD pair could possibly be increased by the release of the CPI index data and the retail sales data. The currency pair could possibly drop to 1.0600 points and could even reach 1.0580 for a short period if the data comes out as positive.

GBP/USD Fundamental Analysis: March 15, 2017

The sterling pound has been widely expected by analysts to undergo a lot of pressure both in the short term and medium term, with bounces in the GBP/USD pair translating into selloffs and this was what the market has been seeing in the past few days as far as the GBP/USD pair is concerned. The currency pair briefly bounced at the 1.2250 region but eventually fizzled out as the pair was met with massive selloffs at this region. As of the moment, the currency pair looks very fragile and is currently situated at the 1.2150 barrier, Brexit process notwithstanding.

The invocation of the Article 50 is getting closer but as far as the UK government is concerned, there are no hints yet as to the exact date of the said invocation. The government has already decided to invoke the article this month but has refused to announce the specific date for the event. It is only a matter of time before the invocation but none of them has asked the EU leaders with regards to the timeline of the said process. It appears that there has been no consultation whatsoever between the eurozone and UK leaders with regards to the date of the invocation, and some EU officials are even saying that the actual negotiations might have to wait until June even if the invocation happens this month. Due to this confusion, the sterling pound has been consistently kept under pressure, with the GBP/USD pair in the midst of suffering.

In addition to the mentioned uncertainties, the UK Deputy Governor has also announced his resignation, adding up to the already heightened concerns within the economy. The FOMC rate announcement will be happening later today, and a couple of economic data such as the CPI index and retail sales data are also due to be released today. These are all expected to further induce the GBP/USD pair to plummet towards 1.2000 in the short term basis.

USD/CAD Fundamental Analysis: March 20, 2017

The USD/CAD pair lost over 200 pips last week and although the currency pair managed to make some measure of recovery before the week came to a close, it is obvious that the USD/CAD pair has now reverted to its larger ranges, thereby making it much more vulnerable to its range lows. The pair has incessantly moved towards 1.3500 points during the past few months but has been unable so far to break through this barrier, causing the currency pair to retreat to its bottom rungs at the 1.3000 region.

One of the reasons for this recent retreat in the USD/CAD’s value is that the USD has started weakening across the board as a reaction to the recent release of the FOMC rate announcement and the subsequent statement from the central bank. The interest rate hike from the Fed was already expected by the market and has not affected the course of the USD/CAD direction. However, the market was disappointed with the lack of enough hawkishness from the Fed’s statement after the central bank chose to remain neutral, leaving a lot of speculations in its wake with regards to the pricing of the next interest rate hike. As a result, the US dollar was subject to a lot of selling across the board, with the USD/CAD pair going down from 1.3500 to 1.3400 points and even want as far down as 1.3300 before finally hitting some solid support barrier which enabled it to hold on its own until the rest of the week ended.

For this week, the Canadian economy will be releasing its retail sales and CPI data while there are no expected releases from the US economy. If Canada continues releasing a slew of positive economic data, then the USD/CAD pair could possibly drop further in value and could reach 1.3100 points. This particular price action is pretty much expected from the currency pair since the dollar is also expected to drop in the short term as well. However, there is still a possibility that the pair will maintain its stance on the 1.3000 points and the dollar would revert, thereby pushing the currency pair towards 1.3500 points.

USD/JPY Fundamental Analysis: March 20, 2017
The USD/JPY closed down last week’s session on a much lower note as a reaction to the Fed policy statement as well as its interest rate projections. The USD/JPY finished off last week at 112.616 points after going down by -0.59% or 0.670 points. The currency pair underwent significant pressure last week as the Fed failed to outline a specific timeline for its next rate hike in spite of the central bank increasing its interest rates.
Prior to this particular decision from the Fed, market players had been expecting a total of four interest rate hikes for the duration of the year, which is why a lot of US Treasury investors had to adjust their portfolios accordingly following the Fed announcement due to a shift in general market sentiments. In addition to the Fed rate hike, the BoJ also voted 7-2 on its decision to maintain its yield curve control policy, wherein BoJ officials favored to maintain its zero target for 10-year Japanese government bond yields. In addition, the Bank of Japan also added that it will be continue buying Japanese government bonds at 80 trillion yen or $705 billion per annum.
There are no major economic reports set to be released from the Japanese economy for this week, but the US economy will be releasing its core durable goods data and unemployment claims data this week. Janet Yellen will also be making a statement this coming Thursday. As such, the price action of the USD/JPY for this week would most likely be dictated by the G20 decisions set to be released this week.

GBP/USD Fundamental Analysis: March 20, 2017

The GBP/USD pair had probably some of its best weeks in recent market history after the currency pair surged by almost 300 pips last week and closed down last week’s session near its range highs, which should be a cause for celebration for the pair’s bulls. This move was also augmented by the recent weakness in the USD’s value, thereby enabling the currency pair to recover from its recent lows at 1.2100 points and has caused the pair to move towards 1.2200 and 1.2300 points. The GBP/USD pair is now trading at just under 1.2400 and looks poised for more.

This recent increase in the GBP/USD pair’s value was due to the Fed’s decision to keep mum on the schedule of its next interest rate hikes while at the same time increasing its interest rates. This uncertainty did no good for the dollar bulls since the bulls have been expecting a strongly hawkish statement from the central bank. As a result, the USD was met with large-scale selloffs, which enabled the currency pair to move towards 1.2200 points. The sterling pound also got another boost from reports that one BoE official had voted in favor of an interest rate hike in order to help support the country’s economy. As a result, the GBP/USD pair managed to go past 1.2300 points and closed down the week at 1.2400 points.

The currency pair is expected to maintain its bullishness in the short term but could possibly weaken in the medium term as the Brexit process begins which will put the GBP/USD pair under considerable pressure. There are no major news releases from the US but the UK will be releasing its retail sales data. This recent surge in the GBP/USD’s value is most likely to fizzle out eventually and would not be sustained in the long run.

USD/CAD Fundamental Analysis: March 21, 2017

The USD/CAD pair merely continued its weak trading streak within a limited trading range as the currency pair awaits clues on its price action as dictated by its fundamental indicators. Previously, the USD/CAD pair had already dropped in value last week following the FOMC rate statement, which disappointed investors in general, and since then the currency pair has been unable to make any significant progress and if the pair does move forward, it will be more of a consolidation in order to recover its recent losses than any move towards a definite direction.

The USD/CAD is currently trading at just over 1.3350 points, with the market expecting the currency pair to consolidate within the 1.3300-1.3400 region. The pair is expected to return to its wider trading range and could possibly reach 1.3000 points in the near future. The USD/CAD pair, along with other major currency pairs, are expected to consolidate within a much higher range in spite of their collectively high volatility levels.

The Canadian economy has been consistently releasing a slew of positive economic data, and this is expected to be very good news for the Canadian dollar and could cause the USD/CAD pair to retreat to 1.3000 points. For today’s session, Canada will be releasing its core retail sales data, which will be closely monitored by market players as this will be an important gauge on the overall health of the Canadian economy. If the data meets market expectations, then the USD/CAD pair could retreat towards 1.3300 points and could be poised for more retractions depending on the strength of the said retail sales data.

March 21, 2017

Reshuffle of China’s Central Bank's Monetary Policy Committee

China has reshuffled its cabinet officials. Guo Shuqing has been appointed as China's banking regulator of the central bank's monetary policy committee. He was positioned as the chairman of the China Banking Regulatory Commission. On the other hand, Ding Xuedong replacing the Xiao Jie, was appointed as the finance minister who is the former deputy secretary-general of the committee.

The policy meeting is scheduled to gather every quarter of the year to talk about the current economic and policy concerns and have their suggestions. Although, the final decision of main primary currency rate and borrowing rates should be approved by the senior cabinet as well as the party leaders.

March 21, 2017

Iranian Year is a Year of “Economy of Resistance”, Khamenei Says

The supreme Leader of Iran, Ayatollah Ali Khamenei have reiterated on Monday for a call of a “resistance economy” which underlines the domestic production. Khamenei further mentioned that officials should also prioritize major concerns in relation to jobs and youth employment. He added that economic problems, inclusive of discrimination, inflation, social imparity and unemployment, causes people to feel bitterness particularly those in the working class.

The 77-year old leader addresses May elections which involve the possible second term of President Hassan Rouhani, even though he currently faces extensive criticism from conservatives due to the stagnant economic condition.

Rouhani administration was able to sustain the economy from the time he was in the position in 2013. The inflation was trimmed by 40 percent and lower than 10 percent while global sanctions were depleted by means of a nuclear agreement with the world powers. However, members of Iran Conservatives doubt the benefits of the nuclear deal concessions.

On the other hand, Rouhani attempt to justify his accomplishments after the broadcast made by Khamenei.

March 21, 2017

Iranian Year is a Year of “Economy of Resistance”, Khamenei Says

The supreme Leader of Iran, Ayatollah Ali Khamenei have reiterated on Monday for a call of a “resistance economy” which underlines the domestic production. Khamenei further mentioned that officials should also prioritize major concerns in relation to jobs and youth employment. He added that economic problems, inclusive of discrimination, inflation, social imparity and unemployment, causes people to feel bitterness particularly those in the working class.

The 77-year old leader addresses May elections which involve the possible second term of President Hassan Rouhani, even though he currently faces extensive criticism from conservatives due to the stagnant economic condition.

Rouhani administration was able to sustain the economy from the time he was in the position in 2013. The inflation was trimmed by 40 percent and lower than 10 percent while global sanctions were depleted by means of a nuclear agreement with the world powers. However, members of Iran Conservatives doubt the benefits of the nuclear deal concessions.

On the other hand, Rouhani attempt to justify his accomplishments after the broadcast made by Khamenei.

USD/CAD Fundamental Analysis: March 22, 2017

The price action of the USD/CAD pair during the previous session was mostly dictated by the Canadian retail sales data, which came out better than expected. However, one downside to this is that the positivity of the data was somewhat offset by the data last month, which was revised on a much lower level. This correction has then helped remove some of the pressure off of the currency pair and enabled it to move towards 1.3350 before finally settling at just under this particular range. The pair eventually dropped towards 1.3260 where it is currently situated.

The pair was met with a lot of buying and this has helped the pair to slowly recover towards 1.3300 points, and the correction in the country’s retail sales data enabled the pair to go even higher. The Canadian dollar has also weakened as a reaction to the repeated failed attempts of oil prices to recover from its recent slump, causing the USD/CAD pair to recover towards 1.3350 points and even surpassed this particular barrier.

For today’s session, there are no major news releases from the US economy aside from the oil inventory data, which is expected to affect the status of the CAD based on the currency’s previous price action. Expect the Canadian dollar to drop in value as a reaction to this particular data and consolidate within 1.3300-1.3400 points for the duration of today’s trading session.

GBP/USD Fundamental Analysis: March 22, 2017

The GBP/USD pair has been consistently making its way towards 1.2500 points and it looks like the pair’s bulls are more determined than ever to break through this particular range. As of the moment, the GBP/USD pair is now trading at just beneath 1.2500 points and is bracing itself once the currency pair pushes past 1.2500 points, where it is expected to be met with a lot of sells. The bulls must be able to weather these large-scale selloffs in order for the currency pair to go past this particular barrier.

The UK economy released its inflation data yesterday with a reading of 2.3% going well beyond the initial market expectations. This, along with one of the BoE officials voting for a rate hike just goes to show that the Bank of England’s data and policy seem to be in sync, thereby causing the sterling pound to increase in value. However, now that the GBP/USD pair as well as the euro are both in a very critical situation, the market is waiting whether the currency bulls would be able to break through these respective regions.

However, the positive bearing of the sterling pound does not mean that the currency does not run any risks. We still have the nearing invocation of Article 50 as well as Scotland’s recent demand for an independence referendum, although the market has chosen not to focus on these and instead focus on the weakness of the USD. There are no major news releases coming from both the US and UK economy for today and so the market will be focusing instead on the battle at the 1.2500 barrier, with the market focusing on whether the currency pair will be finally making it through this section or weaken eventually and resort to some more consolidation for the rest of the trading day.

EUR/USD Fundamental Analysis: March 22, 2017

The EUR/USD pair was able to move towards 1.0800 points, with the currency pair managing to stay at over 1.0800 for a brief period. However, since the pair has not yet managed to make a clean breakthrough at this very tough barrier since it only momentarily peeked over this level, the pair’s surge was eventually met with large selling and had no choice but to retreat at just under 1.0800 points.

However, in spite of this particular occurrence, the EUR/USD pair is still trading on a somewhat stronger note, thanks to the pair’s bulls who continue to trade on a strong streak. The EUR/USD pair’s move at under 1.0800 now seems as just more of a correction as the pair’s price are still well-maintained within its range highs. This is why the currency pair might give another shot at surpassing the 1.0800 barrier for today, especially since the forthcoming French polls might have Macron as its next President after all. This is a sigh of relief especially for the EUR currency, since Le Pen, Macron’s opponent, is a widely-known critic of the euro currency. In addition, the pairs bulls are getting a lot of encouragement from the very bullish stance of the ECB, who recently stated that the strength of the euro can be mostly attributed to an improvement in the EU economy. The USD has also been struggling to make significant gains in spite of the recent rate hike and there is a very definite possibility that the pair could possibly move towards 1.1000 points once makes a clean break through 1.0850 points.

There are no major news from both the EU and the US economy for today, and this is why the EUR/USD pair might again attempt to break through its barrier. Traders could opt to wait whether the currency pair is able to surpass 1.0850 during the course of the day.

USD/CAD Technical Analysis: March 22, 2017

The loonie was able to gain enough strength in advance of the report of Canadian Retail Sales. Meanwhile, the broad-based weakening of the greens provided support for the major. Other than that, traders await for the speech to be made by Fed representatives on Thursday.

The USDCAD escaped from the consolidation period and ascended lower yesterday. Sellers made a gapped through 1.3330 in the first part of the day and continued to drive the spot down.

The major was able to maintain an ask tone in the noon.

As illustrated in the 4-hour chart, the price is positioned under 100-EMA. While 100 and 200-EMAs resumed increasing, the 50-EMA preserved bearish pattern.

Resistance reached 1.3330 level, support holds 1.3260 region.

The MACD histogram had a dipped which confirms strength towards the seller’s position. RSI advanced southwards.

A firm break under the 1.3330 handle would risk 1.3260.

GBP/USD Technical Analysis: March 22, 2017

The British currency strengthened as the UK CPI in February exceeded expected results. On one side, the speech of BOE Gov. Carney was in focus yesterday.

The pound established an active stance in the earlier trades after an uncertain position held amid Asian hours. The price has seen spiked in the morning session of EU.

Buyers surpassed 1.2400 and made an advanced move afterwards. The upward momentum is losing its steam with a few pip under 1.2500 mark.

The 200 and 100-EMA resumed to move lower while 50-EMA remain to be in a bullish pattern and the major crossed upwards the 200-day moving averages noted in the 4-hour chart.

Resistance is at 1.2400, support lies at 1.2300.

The histogram grew less indicating a weak position of the buyers as well. RSI oscillator headed higher.

There still a possibility for an extension towards 1.2500. Should buyers collect enough strength to attain 1.2550 in the future.

March 22, 2017

Cuban Citizens in Favor of American Ally

A rare poll conducted over the Cuban populace showed results that nearly all of the citizens of Cuba were in favor of having relations with U.S since a large number of respondents desire for more tourists to come and visit the island and further development of privately-owned businesses.

The survey involves 840 individuals polled late 2016 and led by NORC at the University of Chicago, an independent social research organization, presenting 55 percent of the answer says that normal relations with the United States would be great for the Caribbean nation.

Moreover, participants from ages 18-29 expressed their approval for closer economic relations with the USA reaching 70 percent or 8 out of 10 of the respondents believed for the tourism expansion for the republic.

The poll conducted by NORC was done through face-to-face interviews during October and November of the previous year. The margin of sampling error of the survey is plus or minus 3.8 percentage points.

Withal, there are 77 percent who had an optimistic outlook for the America and others have said that they would leave Cuba if would be given an opportunity. Some people who answered the survey deemed to be more cautious when expressing their opinions.

March 22, 2017

Japan Exports Rose in February After Two Years

Japan exports rose for more than two years in February after a decline in January. It has exceeded the expected 10.6 percent as the annual export grew by 11.3 percent. It reached by1.3 percent in the month of January, as the highest gain since 2 years ago according to the data from the Ministry of Finance.This has caused the trade surplus gap to widen with raising concerns of U.S. protectionism.

The increase in Japan’s trade surplus becomes a problem for the Japanese policymakers after it has been secluded by President Trump, against the competitors from China and Germany. Although the head of Mizuho Research Institute Research Department said that the trade surplus may not have reached dangerous levels but it has been in the lows for a long time.

An economic talk between the U.S. and Japan is scheduled in the middle of April with Tokyo aiming to elude trade arguments concerning car exports concentrating on U.S. infrastructure investment

March 22, 2017

Japanese Exports Surge to Highest Value in Two Years as China Becomes Top Customer

Japanese exports surged for the third consecutive time last month as the country’s economic recovery has been further augmented by an increase in the international demand for the country’s products. This recent increase in the country’s exports is reportedly Japan’s biggest within a two-year period, and is reflective of the Asian Lunar New Year holidays. In addition, Japanese PM Shinzo Abe has also become increasingly outspoken with regards to free trade, which could pave the way towards protectionism within the country.

NZD/USD Technical Analysis: March 24, 2017

The New Zealand dollar preserved its position on the back of steady rate by RBNZ with a record low of 1.75%.

The NZDUSD lies within the narrow sideways channel yesterday. The price hovered in the middle marks of 0.7050 and 0.7025, it keep on moving up and down between the levels.

Based from the data presented of the 4-hour chart, the 100 and 50-EMAs remained below the 200-EMA, the 50-EMA further made an upward crossover the 100-EMA. While the 200 and 100-EMA retained its bearish pattern. The 50-day moving averages directed up.

Resistance hold 0.7050, support lies at 0.7000.

The MACD had moderately decreased indicating weak buyer’s position. The RSI is confined near the neutral zone.

We consider the possibility of the pair to reach 0.7100 in the immediate future.

GBP/USD Technical Analysis: March 24, 2017

The British currency was able to gain strength on Thursday considering the strong report of Retail Sales.

Traders took the GBPUSD near 1.2500 level during the night as it moves closer the level. Bulls tried breaking again through the post-opening of London session, however, attempt remains unsuccessful.

As shown in the 4-hour chart, the price resumed developing well on top of the moving averages whereas the 100 and 50-EMAs drove upwards while 200-EMA appeared neutral.

Resistance came in at 1.2500, support entered 1.2400 mark.

The MACD retained its position indicating buyer’s strength. The RSI oscillator was confined in the overbought territory.

When the pair brings about consolidation over 1.2500, the next focus is 1.2600 resistance region.

EUR/USD Technical Analysis: March 24, 2017

The results for German Consumer Confidence Survey showed downbeat figures which weighed on the single European currency. The greenbacks also softened as the vote for the Trumpcare bill is scheduled amid North American session. In addition to it, traders await for the speech of Janet Yellen joined with some Fed Reserve officials. While investors are hoping to obtain renewed hints with concerns for the possible action about Fed rate increase.

The EURUSD kept its position during morning trades on Thursday. The spot continued to move towards the ascending channel converging on its lower limit.

The EUR rebounded to the 1.0800 level and descended during EU morning session. As outlined in the 4-hour chart, the spot extends its development on top of the moving averages as the 100 and 50-EMA headed upwards while 200-EMA stayed neutral.

Resistance highlighted 1.0800, support pierced 1.0750 mark. Moreover, the MACD histogram weakened indicating a weak position for the buyers as well. RSI is considered neutral.

The current pull back is referred to the profit-taking involving the bulls. The euro could possibly slide through 1.0750 where we could find an upward trend line. The major might received an upwards rejection from the mentioned line.

In case the bulls were able to remain in the driver’s seat, the levels 1.0800 and 1.0850 are considered a competitive price for investors.

EUR/USD Fundamental Analysis: March 24, 2017

The EUR/USD pair exhibited a sideways price action for the majority of yesterday’s session as the market awaited the results of the US healthcare bill’s impending votation. A lot of market players believe that this particular bill is essential to the Trump administration, although some are also speculating that the current administration might be in danger if the bill does not get the required quorum, however this is not how the issue is supposed to unravel.

The uncertainties surrounding the healthcare bill would be clarified by the fact that the Trump administration would nevertheless continue with its present ways regardless of how the healthcare bill pans out. The market had generally expected the bill to conclude to a vote yesterday and this has prompted the EUR/USD pair to remain within its tight-range trading but then the discussions and negotiations within the bill took longer than expected, and a vote could not be made yesterday. As such, the market is hoping that a vote would finally happen within today’s session regardless of the results of the said voting on the bill. Until then, the EUR/USD pair is expected to remain trading sideways as the market waits for the results of the said vote.

Fed member Evans will be speaking during the latter part of today’s trading session but this is not expected to make a significant dent in the USD’s price action. The fate of the US dollar is largely dependent on the results of the healthcare bill vote and if the bill does get passed, then this would mean good news for the dollar and could see the EUR/USD pair breaking the 1.0750 barrier and head towards 1.0700. Otherwise, the EUR/USD pair could possibly test the 1.0800-1.0830 barrier, where it might eventually push through.

USD/CAD Fundamental Analysis: March 24, 2017

The USD/CAD pair continued its tight trading action during the previous session as it did with the past trading days. The currency pair is caught within a very cutthroat range of 1.3300-1.3400 point, where it shows no signs of breaking through anytime soon. The Canadian dollar is looking very weak as of late as oil prices remain under the $50 barrier. In addition, the Canadian economy is also showing absolutely no signs of imminent improvement, causing the Bank of Canada to have a somewhat levelheaded economic outlook for the country.

The USD also has a very dismal outlook as the US economy waits for the results of Trump’s healthcare bill. Trump’s new healthcare is part of the current administration’s plan to stamp out the previous administration’s Obamacare and therefore wield more authority into this particular sector while realizing one of Trump’s campaign proposals. However, the majority of Trump supporters are not too keen with regards to the passing of this particular bill, with the past few days being spent via long discussions and negotiations with regards to this particular issue.

The voting for Trump’s healthcare bill was supposed to come to a conclusion yesterday, but due to lack of significant support from the government this has eventually led to nothing but a series of prolonged discussions, prompting the administration to postpone the vote and hopefully commence the voting today, an influx of support notwithstanding. If the bill manages to get passed, then this could lend support to the US dollar. Aside from this bill, the Canadian economy will also be releasing its CPI data which is expected to impact the status of the USD/CAD pair.

GBP/USD Fundamental Analysis: March 27, 2017

The 1.2500 barrier continues to be a very crucial barrier for the GBP/USD pair. A lot of analysts continue to say that unless the currency pair manages to break through this particular region, then the GBP/USD pair could possibly retreat to the 1.2100 region. This is one of the reasons why the pair’s bulls and bears are fighting it out within this region. Meanwhile, the Article 50 is expected to be invoked this coming March 29, and as based on the market stats, more traders are now piling up on the pair’s shorts as the market expects the currency pair to drop once the invocation commences. The high expectations from the market could possibly spell danger for the currency pair.

Since the market very rarely does what the market expects of it, the risk of a possible short squeeze in the markets could possibly be very bad news for the majority of currency traders. This is why it is very vital to wait and see first whether the currency pair would indeed manage to break through 1.2600 and take profit where it is already short. The data from UK last week has had virtually no impact whatsoever on the country’s economy, and this has heightened the risk for a possible upmove.

For this week, there are no major news releases from the UK economy while the US will be releasing its GDP data. The GBP/USD pair is then expected to undergo a lot of volatility this week especially with the invocation of Article 50 and the onset of month end flows.