GBP/USD Daily Fundamental Forecast – August 21, 2017

The GBPUSD pair briefly threatened to break through the storng support region around 1.2860 as it went as low as 1.2830 on Friday but once again, it was met with a lot of buying which helped to push it back above the support region and we now find it trading comfortably above that region as of this writing. Apart from the quick move to try and make a break, on the back of some dollar strength, there was little action in the pair on Friday.

GBPUSD Within Tight Range

This was the case with most of the currency pairs on Friday with the biggest mover being gold as the dollar tried to gain some strength across the board which was essentially a correction of the downtrend that it is in currently. Though the bulls have managed to hold the support so far, it is good that the bulls do not get carried away by this as they are likely to face a lot of pressure in the short term. Though the support region has been defended, the risks and the uncertainties surrounding the Brexit process continues to exist and this is one of the reasons why the bounces have been weak in this pair.

The pair has not been able to move too far away from the 1.28 region and with the BOE also not supporting the pound too much, as they have basically decided that there wont be any rate hike in the near future and not until the Brexit process is fully settled without any confusion and uncertainty, it looks like a bit of an uphill task for the pound and that is the reason why it is likely to be under pressure during the short and medium term as well.

Looking ahead to the rest of the day, we do not have any major economic news for the day and so expect the consolidation and the ranging to continue between the 1.28 region on the upside and the 1.2860 region on the downside.