GBPUSD’s 1.7000 Break Decided by Fed vs BoE Rate Forecast

Talking Points:

• A pick up in volatility is needed for more substantive market swings and broader trend development

•Volatility is a function of yields - especially given the market's risk exposure

• Top event risk this week is the FOMC decision which taps both risk and interest rate themes

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Chief Strategist John Kicklighter discusses the top Forex fundamental themes for the coming week of trading. These sessions are held live every Monday at 16:30 GMT. GBPUSD stationed ominously below a 1.7000 level that has stood as resistance and support for multiple decades reflects the tension between technicals and fundamentals seen across the market. Whether this pair breaks higher or reverses has a lot to do with whether this week's top event risk - the FOMC decision - can keep pace with the upgraded BoE rate outlook. More broadly speaking, the concern is whether volatility in the form of 'risk' and more normal market swings will occur only when yields begin their recovery or sooner.

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