GBP/USD Daily Fundamental Forecast – February 24, 2017

GBPUSD made some very strong progress over the last 24 hours due to the weakness in the dollar that has been seen all across the board since yesterday morning. The pound did have a dip for a brief while during the Asian session yesterday but the bulls have since gone on a buying spree and have been buying the pair like there is no tomorrow and it is up more than 100 pips since that time and trades above 1.2550 as of this writing.

Is The Pair Ranging or Breaking Out?

There has been no specific fundamental event from the UK that has sought to change this consolidation mode into one of strong bullishness but this move up has been attributed more to the weakness of the dollar rather than the strength of the pound. It could also be that we are approaching the end of the month and usually the pound benefits from the end of month flows. We still believe that this is just a move within the larger range with the highs of the range coming in at 1.27.

So, unless there is a clear break of 1.27, we continue to believe that the pair is in a ranging and consolidation mode. Just yesterday, we had mentioned in our forecasts that the pair has been very volatile within the larger range which gives the appearance that it is breaking out when it moves higher or lower but when you look at the bigger picture, it just continues to trade within a large 400-500 pip range, as it has been doing over the last 2 months.

As we have been saying, any bounce in this pair should be viewed as an opportunity to sell the pair for a return to the middle or the bottom of this large range. Looking ahead to today, we do not have any major news from the UK or the US and so we can expect the pair to continue to trade bullish for today as well.