GBP/USD Daily Fundamental Forecast – June 28, 2017

The GBPUSD pair had moved steadily higher, helped by the rise in the Euro and also helped by the fact that there has not been anything adverse happening in the UK over the past 24 hours. For a country that has been witnessing a lot of political and economic turmoil, it should indeed be considered as an achievement if there isnt much happening there for a day. It was also a day when the dollar weakened across the board and this helped the pair recover as well.

GBPUSD Moves Steadily Higher

The day began quietly for the pair as it traded just above 1.27 for much of the first half of the day. Then came along the Draghi speech where he sounded hawkish on the Euro economy and this helped the euro to move higher. The pound basically piggy-backed on this move to move above 1.2750. Though Carney did not address the monetary policy too much, the pound bulls were happy that he didnt sound adverse and this helped the pound to move still higher as the euro broke through 1.13.

On the other hand, the dollar got itself into trouble as reports began to come in which indicated that the healthcare reform bill was likely to be delayed even further due to the Republicans themselves not being in a position to agree on several of the points. This increased the fear that this plan and other plans of the Trump administration, like the tax cut plan, would face roadblocks and would be watered down and this was not good news for the dollar. This helped to push the GBPUSD pair beyond 1.28 and reach over 1.2850 for a brief while before correcting and it now trades just above 1.28 as of this writing.

Looking ahead to the rest of the day, we have another speech from Carney and it remains to be seen whether he talks up the pound. Though the pound rose yesterday and GBPUSD broke through 1.28, the underlying weakness continues in this pair and unless Carney and the BOE does something to support it, we should see the pair fall back into range and probably move towards the lows of the range again.