GBPUSD - Still in rising channel, does the fundamental support the bulls?

Above is the daily chart of GBPUSD pair. It took around half year to make 3 touches and formed a solid bottom. After the bottom formation, it continues to respect the uptrend line, and consistently making "higher high higher low", which is the typical sign of bull trend.


























If we look at the H4 chart, we can see GBPUSD has been consolidating this month. With the previous rally to 1.3650 due to price in of BOE interest rate, and the tough of daily trend line at 1.2730, this pair has been well respecting the 1.3322 (0.716 fibo) and 1.3029 (0.382 fibo). There is two touches on each side and such pattern is about to end, due to the gradient of uptrend line. By looking at other pairs, such as USDJPY unable to secure it month fibo range and daily resistance, it shows sign of insufficient momentum for bulls. Also for GOLD, the daily triangle broke and its bullish momentum with Oil is huge, these technically support the short term bullish view on GBPUSD.

Technical: Bullish



The future outlook for U.K. is that they need to achieve the inflation target. British return to Europe to reduce the supply of labor, because many EU citizens will return to their own country or will not return to the UK, and the pound depreciation for foreign workers is also attractive. This will lead to supply hindrance, wage growth, demand will further push up inflation. In addition, the return to supply uncertainty seems to be greater than demand.

Excessive demand will lead to domestic inflation rate that much higher than the British central bank 2% target level, even if the pound on the short-term impact of import prices began to subside.

In order to stimulate the British family to reduce loans, increase savings, raise interest rates will let the inflation rally down. Obviously the Bank of England will keep their rate hike plan is 2018.

Fundamental: Bullish



For more analysis and researches, please follow: AMMOSIGNALS