British Pound Q4 Forecast: Pound Traders Will Find Brexit Remains the Driver

As we enter the fourth quarter of 2018, the British Pound is picking itself up from its lows comparable to those plunged in summer 2017, and starting to re-coup some of this year’s losses. The driver for this move is not monetary policy, nor recent data that has held up well in the face of uncertainty, but rather the nagging feeling that a solution to the Brexit conundrum is just around the corner. This overarching driver behind Sterling in the past few months – Brexit – is very likely to remain through the end of the year.

GBP/USD Price Chart: Daily Timeframe (March to September 2018) (Chart 1)

British Pound Q4 Forecast: Pound Traders Will Find Brexit Remains the Driver

Given that the EU had shown signs of budging from their negotiating stance, Brexit risks may moderate in the fourth quarter. Subsequently, this could keep GBP/USD notably firmer and hover around the top end of the 1.3000-1.3500 range. On the daily time frame, momentum indicators suggest that the bias remains tilted to the upside. Eyes are on the 38.2% Fibonacci retracement at 1.3317 (drawn from the April high to August low) before a potential move towards 1.3500.

Article source: https://www.dailyfx.com/forex/fundamental/article/special_report/2018/09/29/British-Pound-Q4-Forecast-Pound-Traders-Will-Find-Brexit-Remains-the-Driver.html