GBP/USD Daily Fundamental Forecast – April 27, 2017

The GBPUSD pair has made steady progress over the last 24 hours but still it is within the range highs in the 1.29 region that was established a few days back. Until this range high is broken, the traders are still open to the risk of the pair correcting back into the 1.26 region in the short term. The bulls seem to be firmly in control but if they find that they are unable to break through the range highs within the next few days, they might want to move the pair down to collect more buyers so that they have enough momentum to push through the 1.29 region when they visit it next.

Pound In Choppy Trading

Over the last 24 hours, we saw a period of tight consolidation in the GBPUSD pair as the market was in a wait and watch mode ahead of the announcement of the new tax plan by Trump. Following the tax plan announcement, we saw the dollar weaken a bit across the board and the GBPUSD pair used this opportunity to push the pair above 1.2850 region where it sits as of this writing and it looks good to make another attempt at the 1.29 region. The tax plan did deliver on most of the rumors that had been circulating about it but it still weakened the dollar after the announcement as most of it was already priced into the markets.

Also, the market is wary on whether Trump would really be able to push through the plan considering that he has been unable to push through on many of his major campaign promises due to lack of support from within his own party. So the market is still a bit sceptical and hence is not yet ready to go all in based on the promises made in the new tax plan. This has placed the dollar on the backfoot since the beginning of the US session and thats what we have been seeing as the GBPUSD pair has made some progress since then.

Looking ahead to the rest of the day, we do not have any major economic news from the UK but we have the unemployment claims data from the US. We expect some choppy trading for the rest of the day.