GBP/USD Fundamental Forecast – May 26, 2016

The GBP/USD neared its highest level since February 4 when it finished the early session at 1.4704, up 0.0070 or +0.48%. The “Brexit” theme continues to dominate the market. Prices have firmed over the past week as polls continue to show a growing number of Brits prefer that Britain remain a member of the European Union.

Also helping to support the market today was the weaker-than-expected U.S. Services PMI report for May. This report gave long U.S. Dollar investors an excuse to book profits after a lengthy run.

The latest poll conducted by the ORB for the Daily Telegraph suggests that “Remain” is building a big lead in the Brexit vote. 50% of respondents said they back staying in the EU, compared to just 42% who said they want to leave.

The referendum will take place on June 23.

The sharp break by the GBP/USD earlier in the year put many investors on the short side of the market. This came at a time when the idea of an exit from the European Union was first introduced. Additionally, it corresponded with the announcement of the referendum. That being said, it now looks as if the Brits want to stay a member of the EU and these shorts have to get out of the market. Look for the Forex pair to trend higher as long as the new polls continue to show that the majority of Brits want to remain in the EU.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Upcoming Economic Events that you should be monitoring:

Thursday, May 26, 2016

Government Bond Auctions

May 25 11:03 Sweden Sek 1bn 3.5% 2022 & Sek 3bn 1% 2026 bonds

May 25 11:05 Norway Holds bond auction

May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

May 25 19:00 US Holds 5Yr Notes Auction, 2Yr FRN

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero-coupon/BTPei auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

May 26 19:00 US Holds 7Yr Notes Auction

May 30 11:10 Italy Holds bond auction

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn Apr 2021 Bobl

Jun 01 11:30 UK 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 11:03 Sweden Holds I/L bond auction

Jun 02 11:50 France Holds bond auction