GBP/USD Daily Fundamental Forecast – July 31, 2017

The GBPUSD pair has managed to recover towards the close of Friday trading which should have been a relief for the pound bulls who have been struggling to push the pair higher. The upcoming week is likely to be a crucial one for the pair and we expect the market to keep the pair buoyed ahead of the slew of data and economic events that are lined up for later in the week. The pair has safely crossed the important resistance in the 1.3030 region and has managed to stay above it so far and this points to further gains in the pair in the coming days.

GBPUSD Likely to Stay Strong

The pair has been struggling a bit over the last couple of weeks as one of its major pillars seem to have given way lately. We have seen over the last several months that despite all the turmoil in the UK and the uncertainty over the Brexit process, the economic data from the UK has always been very strong and stable. But over the last couple of weeks, we have seen the data being mixed and this has led to doubts that the true effect of the Brexit process is beginning to show only now.

This fear and risk has thrown off many investors. But the BOE has always been a very strong supporter of the pound and they have also sent out some very strong messages over the last few weeks with their Governor Carney making it clear that they would do anything to support the pound. We also saw a few of their members supporting a rate hike during the last week which has led to the expectation that there might be a rate hike as soon as this week. It is this expectation that is likely to keep the GBPUSD pair buoyed over the next couple of days or so.

Looking ahead to the rest of the day, we do not have any major news from the UK or the US but as mentioned above, we are likely to see the GBPUSD pair continue to trade in a strong manner in anticipation of a rate hike later in the week. If the hike does not come along, then we could see a large correction in the pair.