GBP/USD Daily Fundamental Forecast – February 23, 2017

One again yesterday, the GBPUSD pair spent its time in consolidation and ranging despite all the volatility and the news events around it. This has been the feature of this pair for the past few weeks and though the pair has been quite volatile, it can be clearly seen that it is caught within a specific range and has not been able to break through that range though it has been very active within that.

GBPUSD Consolidates Before and After

Yesterday, all eyes of the market was on the FOMC meeting minutes and true to form, the GBPUSD pair did not move much during the first half of the day. Then the minutes were released and contrary to expectations, the minutes were not as hawkish. The members chose to maintain a diplomatic stance in calling for a rate hike pretty soon without in any way, confirming that there would be a rate hike in March. This disappointed the dollar bulls and the dollar has weakened across the board since.

But amidst all this drama, the pair continues to trade in a steady manner as it dropped very close to 1.2400 immediately after the release of the minutes but has since recovered based on the dollar weakness. It now trades just above 1.2450 as of this writing and seems to be caught within a small range between 1.24 and 1.25 over the past couple of days. We expect this consolidation to continue in the days ahead as well as the Article 50 gets passed through the Parliament and is finally expected to get invoked in March.

Looking ahead to today, we do not have any major news from the UK while we have only the unemployment claims data from the US and this is not expected to affect the GBPUSD pair in any way. Traders can continue to trade the range extremes in a safe manner with a stop loss beyond the extremes.