GBP/USD Daily Fundamental Forecast – August 9, 2017

The GBPUSD pair broke through the important support region between the 1.3000 and 1.3030 regions and this has made the pair look quite weak in the short term. It did manage to stay afloat for a large part of the day yesterday but the release of a strong JOLT employment report from the US was enough to trigger a dollar recovery which then pushed the pair through the 1.30 region to close to the 1.2950 region.

GBPUSD Breaks Through Important Support

The pair has since recovered a bit as the pound has caught a bit of a bid and now we see the pair trading just above 1.2980 as of this writing but the weakness is there for everyone to see. We have also seen an increase in global risk over the last 24 hours as North Korea continues to threaten attacks and this has led to a risk off mode in the markets with the stock markets dropping and this has tended to have an effect on the currency markets as well. This is also one of the reasons why we have seen the dollar recover across the board over the last 24 hours.

With this break through the region and with the risks and the uncertainty continuing in the pound due to the Brexit negotiations, we expect the pound to continue to trade weakly in the short term. Last week, we saw the BOE basically give up much of its support of the pound by being dovish on the UK economy and with one major pillar of support gone, the pound is now exposed to the whims of the markets and they do not have a very bright view of the pound just yet.

Looking ahead to the rest of the day, we do not have any major news from the UK or the US for the day but we expect this weakness to continue in the GBPUSD pair in the short term. We might see a bit of a bounce back to the broken support region in the 1.3000-3030 region but this is likely to be short lived and sold into.