GBP/USD Daily Fundamental Forecast – March 29, 2018

The pair has been having a highly volatile time over the last 2 days as the pair has risen and fallen during this period with no specific drivers. We have warned of such moves in the GBPUSD in our earlier forecasts as we approach the month end due to the end of month currency flows and this is what we have been seeing as the volatility has picked up in the pair over the last couple of days.

GBPUSD Back Towards Support

The pair fell back towards its support region of 1.4060 during the course of trading yesterday as the dollar began to pick up in strength. There has been no specific fundamental reason for the strength in the dollar, as the economic data and news go missing towards the end of the month, but there seems to be a general improvement in the sentiment towards the dollar since the beginning of the week as the threat of a global trade war begins to recede in a slow and steady manner.

As these risks and threats begin to recede, we are finding that the market begins to focus on the positives and the fundamentals of the dollar and the US economy which continue to remain strong as the incoming data over the last few weeks continues to throw up some strong numbers. But what should remain in favor of the pound bulls is the fact that the pair continues to remain above the important 1.4060 support region which should convince the investors and the traders to continue to stay invested in the pound in the hope of higher value in the short term.

Looking ahead to the rest of the day, the traders should continue to guard themselves against any further volatility in the pair as the month end approaches. We have the current account data from the UK later in the London session but that is unlikely to have much of an effect on the pair in the overall scheme of things.