GBP/USD Daily Fundamental Forecast – January 25, 2018

The GBPUSD pair has rocketed higher and now trades above the 1.43 region as of this writing. There was a very brief look just below the 1.40 region yesterday but since then, it has been one way traffic and the pair has since risen by over 300 pips. It all looks a bit over the top at the moment but the market can continue to remain without its senses until we lose ours.

GBPUSD Rockets Through 1.43

The dollar has been suffering all across the board and the focus for this week has been on the dollar rather than on the pound. The latest fall for the dollar gave from statements from the US treasury secretary who said that he prefers a weak dollar as it would help the US economy and trade. This added to the uncertainty and the edginess in the markets which had been existing due to the protectionist measures being adopted by the Trump team to protect the US trade and the fear that it could lead to a global trade war.

This was enough for the dollar to be sold off across the board and that basically just continues the selling that we have been seeing since the middle of December. The pound has been the best beneficiary of all this selling as it has risen by over 800 pips during this period and continues to look strong as the pound by itself has gained strength due to the expectations that the UK would have a softer Brexit than what was expected.

Looking ahead to the rest of the day, we do not have any major news from the UK or the US but the focus would be on the ECB and whether they would try to talk down the euro in a bid to control its move higher. This could have an impact on the pound as well as this could help the dollar to gain in strength but it is all conjecture at this point of time. We could see some traders trying to take profits ahead of the meeting.