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GBP/USD – Pound Ticks Higher, US Final GDP Ahead

The British pound is showing limited movement in the Wednesday session. In North American trade, GBP/USD is trading at 1.3407, up 0.15% on the day. Earlier on Wednesday, BoE Governor Mark Carney testified before the Treasury Select Committee in London. On the release front, CBI Realized Sales slowed to 20, shy of the estimate of 21 points. In the US, Existing Home Sales surged 5.81 million in November, its strongest pace since December 2006. Thursday is a busy day in the US, with the release of third quarter Final GDP. We’ll also get a look at the Philly Fed Manufacturing Index and unemployment claims.

Brexit talks are expected to focus on trade relations, as sufficient progress has been made on other issues, such as the size of Britain’s divorce bill and the Northern Ireland border. What will a trade relationship between Britain and the European Union look like? That remains unclear, but it’s no secret that the two sides have very different views of a future trade agreement. BoE Governor Mark Carney waded into the thorny issue on Thursday, in testimony before a parliamentary committee. Carney took issue with comments by Michel Barnier, the EU’s senior negotiator. Barnier said Britain’s financial services would not be included in a Brexit deal, as no free trade agreements have included financial services. Carney disputed Barnier’s reasoning, saying that British financial system is “effectively the banker for Europe” and there was no reason why the UK and the EU couldn’t maintain some type of free trade in financial services. Clearly, the sides remain far apart on the “end phase” of what a Brexit agreement will look like, and negotiations promise to be protracted and difficult.

It’s been a tough battle for Republicans, but President Trump’s election pledge to implement major tax reform is on the verge of becoming law. The tax bill was passed in the House of Representatives and the Senate on Tuesday, but the bill is being sent back to the House for another vote on Wednesday due to a procedural requirement. The legislation is expected to be ratified by the House and will then be sent to Trump to be signed into law. As expected, the congressional votes went along party lines, with the Senate narrowly approving the bill by a count of 51-48. This marks the first major overhaul of the US tax code in 30 years, and reduces corporate taxes from 35% to 21%. After failing to overturn Obamacare, the Republicans can finally chalk up their first legislative victory in the Trump administration, ahead of Congressional elections in 2018.

GBP/USD Fundamentals

Wednesday (December 20)

Thursday (December 21)

*All release times are GMT

*Key events are in bold

GBP/USD for Wednesday, December 20, 2017

GBP/USD December 20 at 11:05 EDT

Open: 1.3386 High: 1.3419 Low: 1.3378 Close: 1.3407

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3186 1.3221 1.3402 1.3503 1.3655 1.3809

GBP/USD was flat in the Asian session. The pair edged lower in the European session and has partially recovered in North American trade

Further levels in both directions:

OANDA’s Open Positions Ratio

GBP/USD ratio is unchanged in the Wednesday session. Currently, short positions have a majority (52%), indicative of slight trader bias towards GBP/USD continuing to move higher.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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