GBP/USD Daily Fundamental Forecast – March 20, 2018

The pound got a huge boost yesterday which probably explains why the investors and traders were optimistic over the pound over the last few weeks. The pound shot higher on positive developments surrounding the Brexit process and this helped the bulls to finally breach the 1.40 region and bring about the breakout that they have been looking for, all this while.

GBPUSD Gets a Shot in the Arm

The GBPUSD pair had been locked between the 1.38 and the 1.40 region for the last few weeks and it appeared that it needed something very strong and fundamental for the prices to break through this region. But the fact has to be agreed that the prices continued to be buoyant despite the strength in the dollar and this had indeed given a hint of the things to come. The first boost came in the form of the Brexit process developments where all the agreements are reported to have been made in a smooth manner except for the Irish border deal.

This is the short in the arm that the pound bulls needed and this led to a sharp breakout through the 1.40 region and though this move corrected later in the day, the bulls managed to hold the prices above the 1.40 region and this has helped them to gain confidence over the short term. We have the Fed meeting later in the week where the Fed is expected to hike rates for the first time this year but experts believe that the Fed would not be able to satisfy the market anticipation which should lead to the dollar weakening post the announcement.

If this happens, then it would be a further boost to the bulls in this pair and fuel the second leg higher. Looking ahead to the rest of the day, we do not have any major economic data or news from the US but we have the inflation data in the form of CPI from the UK which should help the pair to be volatile. It could be a further push to the bullish trend if this data comes out stronger.