GBP/USD Daily Fundamental Forecast – August 11, 2017

The GBPUSD pair got a boost yesterday on the back of strong manufacturing production data but the effect of the boost began to wear away slowly as the day progressed and now the pair is almost back to where it started, as of this writing. The pound has been unable to gather too much strength over the last few days and with the break through the key 1.3030 region, the pair continues to look weak and it remains to be seen how it will close for the week as that is likely to determine the short term direction for this pair.

Pound Looking for Direction

The pound got a well needed boost yesterday just when it began to flounder at the lows and it looked as though it might fall further. The manufacturing production data came in as per expected at 0.0% but the reading from last month was revised higher. This was good news for the pound as it is probably an indication that the UK economy is getting back on track after having had choppy incoming data over the last few weeks. The GBPUSD pair shot higher as it tested the highs of the range but once again, it was met with a lot of selling and it corrected lower.

Later in the day, we continued to see the US and North Korea trade charges against each other and this evoked a mixed reaction from the dollar as it fell against certain currencies like the euro but continued to recover against the pound and this caused the pound to correct lower and fell below the 1.30 mark where it continues to trade as of now.

The key event today, in the absence of any economic data from the UK, would be the CPI data from the US which would be watched closely for any signs of strength in the US economy. The NFP data last week pointed to a recovery in the US economy and hence the dollar and the market would be looking for a confirmation of that in the CPI data later today. This will determine the short term direction for GBPUSD.