GBP/USD Daily Fundamental Forecast – April 26, 2017

The GBPUSD pair is pushing itself into a tight corner as it continues to consolidate and range near its highs though the other pairs have benefited with the dollar weakness over the past 24 hours and have managed to move higher during this period. This pair is stuck below the strong selling in the 1.2850 region and we had mentioned the same in our forecast last week where we expected a stall and a lot of resistance in the 1.2850 region and had also mentioned that the traders should be wary of some correction in this region.

Pound Trades Itself into a Corner

Of course, the bulls continue to be in control of this pair but they need to collect some momentum from somewhere so that they can push the pair through the 1.2850 region and then aim for the important psychological figure of 1.30. Over the last 24 hours, almost all the other USD based pairs were able to make some solid progress but the pound continues to lounge about, helped by some strong EURGBP buying which has pushed the euro higher and kept the pound silent.

We have also been hearing reports even if the UK were to exit the Eurozone, they would have to pay their eurozone fees through till 2020. Irrespective of whether this report is true or false, it just gives a hint of the range of discussions and the range of uncertainties that the negotiators and the markets would have to deal with when the UK and the Euro leaders sit to discuss the Brexit process. This has made the traders and the investors a bit wary to invest in the GBPUSD pair at this level and this uncertainty is evident in the consolidation that we are seeing in this pair.

Looking ahead to the rest of the day, we do not have any major news from the UK or the UK for the day and so we can continue to see some consolidation. Traders would be watching keenly for a break and retest of the 1.2850 region so that they can get in on the next leg of the bull run. Until that happens, the risk is to the downside on the GBPUSD pair.