GBP/USD Daily Fundamental Forecast – August 15, 2017

The GBPUSD continues to trade within a tight range and the ranging points to a situation where a breakout on either side could lead to a large move. Yesterday was the first day of the week and so it is natural to expect some sort of a consolidation and ranging during the day as the traders slowly return back to their desks and begin to establish their trades and positions for the week. But unlike other pairs, this pair has been in consolidation for quite some time now and it is time that there is some breakout soon.

GBPUSD Pair Looks Weak

The GBPUSD pair broke through the 1.3030 region during the course of last week and ever since that time, it has been trying to break back through that region for the bulls to fully establish control but the traders have not been able to achieve that so far, despite their best efforts. On the other hand, the bears have been trying to push the prices through the 1.2950 region so that they can bring in some panic selling and take control of the prices but that also has not happened so far.

The confusion and uncertainty surrounding the Brexit process continues as the negotiations take their own sweet time getting done and it is also likely that the traders might be getting a bit impatient about it. The incoming data from the UK has picked up and started getting better again but so far, it has had limited impact on the prices.

Looking ahead to the rest of the day, we have the inflation data in the form of CPI from the UK and this is likely to bring in a lot of volatility. We dont think any kind of CPI data would change the decision of the BOE to not hike rates any time in near future as they wouldnt want to add to the confusion around the Brexit process. We also have the Retail sales data from the US and a combination of these 2 economic data is likely to help in breaking this tight range and point us to the short term direction.