GBP/USD Daily Fundamental Forecast – August 29, 2017

The GBPUSD pair continues its recovery, thanks for the weakness in the dollar, but the region around 1.2950 has served as a strong resistance so far with a lot of selling being witnessed in that area. It was a holiday for the London markets yesterday and this could also have been a reason for the pair not being able to move much higher. With the London markets back in business again today, we should probably be able to see a lot more volatility in the pair today.

GBPUSD To Be Volatile Today

The London markets have not had a chance to react to the speeches from Draghi and Yellen as they came late in the day on Friday and yesterday was a holiday. So, this is their first chance to react to the same and it remains to be seen whether they bring in some sort of a correction in the pair, in an attempt to buy the pair at lower prices. A break through the 1.2950 could easily carry the pair on to 1.30 and probably towards 1.3030 where it is likely to be a battle between the bears and the bulls.

The fact that Yellen chose not to touch upon monetary policy has led to this round of selling in the dollar and this has helped the GBPUSD pair to push through 1.29 and trade in a strong manner. We are heading towards the end of the month and hence are likely to see some month end currency flows as well, which generally affect the pound a lot. It remains to be seen how the pound will react to all of the above when the London session begins as that is likely to be the key going forward.

Looking ahead to the rest of the day, we do not have any major news from the UK while we have only the consumer confidence data from the US. We believe that the GBPUSD pair will continue to trade in a buoyant manner for the rest of the day with the region around 1.3030 capping any upmove.