The GBPUSD pair also had a tight ranging week where it spent most of the time in a range of around 100 pips only. The pair could not take full advantage of the weakness in the dollar that continues to exist all around the market and was happy and content to spent the time below the 1.36 region.
GBPUSD Moves In Tight Range
It was generally expected that the dollar would be able to regain back most of its strength as the market returned to normal volume but so far, there has been no signs of it. The dollar had been battered over the course of the last 2 weeks in December as the traders used the opportunity provided by the low liquidity in the markets, to push the dollar to the wall and this helped the pound to move through the 1.35 region though there were not any major fundamentals to support the move.
This led to the belief that this move would be reversed last week but that did not happen as both the pound and the dollar struggled with some bad incoming data, with the UK having the PMIs coming in weaker and the dollar seeing the NFP coming in weaker. This led to a kind of stalemate in the pair which saw the pair end the week below the highs of its range at the 1.36 region.
Looking ahead to the coming week, we have the manufacturing production data from the UK while we have the PPI and the inflation data along with the retail sales data from the US. Next week would be the first full trading week of the year and the market is likely to return to full liquidity and it remains to be seen whether that would spark a recovery in the dollar and help to push the pound through the support region at 1.35.
This article was originally posted on FX Empire
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