GBP/USD Daily Fundamental Forecast – November 6, 2017

The GBPUSD pair continues to lounge about near the lows of its range over the past couple of days and it has been doing so as of this morning as well. The strength of the dollar is beginning to take root and that has been placing the pound, as well as the other currencies, under pressure against the dollar.

GBPUSD Heads Lower

The dollar has gained ever since the release of the NFP employment data from the US on Friday. Though the current month data came in weaker than expected, the data from the previous month was revised higher which basically meant that the dollar held steady post the release of the data and this was reflected in the pair which did not show much of a reaction to the news. It was only later in the day that the dollar began to gain in strength and this has since forced the GBPUSD pair towards the lows of its range in the 1.3050 region where it trades as of this writing.

The pound in itself has been quite week for the past few days despite the hike in the interest rates by the BOE. They followed this with a grim outlook for the UK economy, especially with the uncertainty of the Brexit looming ahead. This painting of a grim picture did not make the bulls happy and they joined the traders in selling off the pound which has dropped lower by about 2 cents over the last couple of days. We believe that the pound would continue to trade weakly in the short and medium term as the dollar gains in strength.

Looking ahead to the rest of the day, we do not have any major news from the US or the UK for the day and hence we can expect some consolidation with a bearish bias during the day. The pound is near a very strong support region and hence it would be interesting to see if the support gets broken during the course of this week. If it does, then we can see the GBPUSD pair heading towards 1.28.