GBP/USD Daily Fundamental Forecast – July 20, 2017

The GBPUSD pair was in a tight range much of the day as the traders and the investors were lost for direction in the absence of any specific drivers in the market. The pound had been looking strong at the beginning of the week after making a run towards the 1.31 mark on the back of weak CPI data from the US but it got entangled with its own bad data this week which has pushed the pair back below the critical region around 1.3030.

GBPUSD Consolidates in a Weak Manner

It remains to be seen how the bulls are going to extricate themselves from this entanglement with the absence of any specific data from the UK. The Brexit negotiations are going on as planned and so far, we have not had any specific market moving news as yet and it remains to be seen how long this is going to be so.

What should concern the pound bulls, though, would be the fact that the economic data in recent times has not been as good as they would have hoped and this is probably the time when the real post-Brexit data is going out. For many months since the start of the year, we continued to see some strong incoming data from the UK which led to the belief that the Brexit process has not affected the economy as such but the data of recent times should raise some concerns. This is also likely to throw a spanner in the works as far as a rate hike by the BOE is concerned and this is the reason why the pound is at the cross roads right now.

Looking ahead to the rest of the day, the focus of the market is likely to be on the euro as the ECB announcement and press conference is lined up for the day and the effect of that is likely to be seen on the GBPUSD pair as well.