GBP/USD Daily Fundamental Forecast – July 7, 2017

It did take a while for the pound to get going but ultimately it did manage to join the other currencies in moving higher against the dollar as the dollar weakened across the board during the course of the day yesterday. The dollar bulls had been buying the dollar in anticipation that the data from the US would start getting better but they were in for a further shock yesterday.

GBPUSD Likely to Remain Bid

We saw the ADP employment data come in at a weaker than expected value of 158K against the expected value of 185K and this was not what the dollar bulls would have expected. Of course, the NFP that is scheduled to be released today is usually considered as the better indicator of employment in the US but the ADP does act as a precursor to the NFP most of the time and this has led to worries that the NFP might also miss the estimates.

This also continues the trend of weak data from the US that we have been seeing over the past couple of months or so. The Fed had sounded confident that the data would get better with time and they had gone ahead with the rate hike in June but so far, there have been no signs of the data getting better. This should worry the dollar bulls and they are likely to be watching the NFP data very closely today. But on the other hand, the GBPUSD pair did not gain too much from this and it is up only by about 50 pips or so on this news. The bulls in this pair would rather wait for the NFP today before taking any specific action, especially with the strong resistance at 1.3030 looming just ahead.

Looking ahead to the rest of the day, we have the manufacturing production data from the UK and then the NFP and the wages data from the US. Of course, the data from the US is likely to be the bigger market mover and any kind of weakness in the report would be used by the GBPUSD bulls to try and push through the crucial 1.3030 region.