GBP/USD Daily Fundamental Forecast – August 87, 2017

GBPUSD suffered a double whammy last week as it was let down by the ECB and then got hit by the NFP from the US. The ECB had been doing its bit by sounding hawkish whenever it could do but when it came down to delivering the actual blow, they had to consider various options and their repercussions and had to hold back, which was the sensible thing to do considering the circumstances that the UK economy finds itself in.

GBPUSD Looking Weak

If the reluctance to raise rates from the ECB had caused the initial reversal in the GBPUSD pair, the NFP basically brought in even more agony on the pound. The NFP came in at a much better than expected value of 209K and this pointed to a reversal in the trend of weak economic data from the US, which had been hitting the dollar hard over the last few weeks. This was a relief for the dollar bulls who then jumped in on the dollar longs. We had pointed out to the possibility of this reversal happening from 1.3250 where we had witnessed a lot of selling.

Now, due to a combination of these events, we find the GBPUSD pair back in the strong resistance turned support at 1.3030. It bounced from that region on Friday but so far, the bounce has been shallow and does not inspire too much of confidence and it remains to be seen how long the pound bulls would be able to hold out in this region.

Looking ahead to the rest of the day, we have a couple of Fed members speaking but apart from that, we do not have any other major news scheduled to be released today. We are likely to see some consolidation in this region for the time being while the London session might bring the 1.3030 region back into focus.