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GBP/USD Daily Fundamental Forecast – December 2, 2016

By:
Colin First
Published: Dec 2, 2016, 02:46 UTC

GBPUSD, free from the burden of the month end flows, had a very bullish day yesterday. In the first part of the week, we had seen that the pound had been

GBP/USD Daily Fundamental Forecast – December 2, 2016

GBPUSD, free from the burden of the month end flows, had a very bullish day yesterday. In the first part of the week, we had seen that the pound had been under pressure from the month end flows and it was consolidating on either side of 1.2500 but we had mentioned in our forecasts that even though it was under pressure, it was able to bounce back strongly everytime and that when the new month begins, we should be able to see the effect of that and thats what we saw yesterday.

There was a bout of dollar weakness yesterday and that was well utilised by the pound bulls to push the pair higher. There was no specific reason for the dollar weakness and it was more a correction of the strength that we have been seeing in the dollar over the past couple of weeks rather than anything else. This helped to push the pair through 1.2500 and towards 1.26 and it sits just below this as of this writing. This, despite the fact that the Manufacturing PMI from the UK came in worser than expected and the ISM Manufacturing PMI from the US came in better than expected. We expect this momentum to continue during the Asian and London Session.

GBPUSD Hourly
GBPUSD Hourly

Just before the NY session begins, we have the NFP employment data which normally brings with it a lot of volatility. The market will expect some good numbers, as has been the case with most of the US data recently, so that it can continue to price in the December rate hike and further hikes in 2017. If the data comes in weaker than expected, then we can expect the GBPUSD pair to push through 1.2600 and test 1.2700 as well as the dollar weakness would continue to end the week. If the data comes out stronger, then we can expect the pair to correct back towards 1.2500.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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