GBP/USD Daily Fundamental Forecast – February 28, 2017

The GBPUSD pair got hit hard yesterday making true our suggestion that this pair is something that is quite risky to trade for the bulls. Try as they might, the bulls cannot seem to be able to keep a good run going and everytime that they manage to bring in a bounce in the prices, it is met with some quick selling and the pair goes down. Withe Brexit process still ongoing and expected to continue for some more time to come, the fears are expected to continue to loom overhead the GBPUSD and this will ensure that the pair cannot move higher even if it tried.

GBPUSD Likely to Remain Under Pressure

Yesterday, the pair was hit hard due to rumors that the Scots were trying to go in for another referendum to see whether they wanted to continue as part of the UK. If that happens, then the economy of the UK would likely be hit hard and it is also possible that other parts of the UK might be encouraged to follow the same route. This is probably the last thing that the UK government would want but the Scots have been hurting ever since the Brexit vote as they had chosen to stay in the Eurozone but were outvoted by the rest of the UK.

So, it is easy to see why the Scots would want to move out of the UK but the confirmation of the referendum never came and this resulted in the GBPUSD being able to bounce off from its lows below 1.24. It trades just below 1.2450 as of this writing.

Looking ahead to today, we do not have any major news from the UK and we have the Prelim GDP and consumer confidence data from the US. We believe that the pair would continue to be under pressure for the rest of the day with 1.25 proving to be a cap on any upmove.