GBP/USD Daily Fundamental Forecast – June 30, 2017

As we had mentioned in our forecasts yesterday, the GBPUSD pair has continued to move higher during the course of the day yesterday and it continues to look strong as the dollar is clearly on the backfoot all across the board. The latest bullish run in the pound has come about as a result of hawkish comments from Carney and the effect of that is likely to last for the short term till the next wave of economic data will come in during next week which is the first week of the month.

GBPUSD In Important Region

Credit has to be given to Carney and the BOE for getting into action pretty quickly and supporting the economy and the currency through their hawkish comments. They could have delayed this and put the pound in serious danger of falling off but they have realised the danger that the pound was in and have stepped in when it has been necessary for them to do so. They stepped in with their hawkish voting just when the pound was reeling under the UK election results and they have stepped in again now when the pound looked weak despite the dollar weakness.

Carney said that they were seriously looking at reversing their easing policy and this, combined with the 3 members of the BOE voting for a rate hike, makes it look as if we are very close to seeing some major monetary policy changes in the coming months. This has been supportive of the GBPUSD pair which trades just below the key region at 1.3030 and looking ominously close to breaking through. The Brexit negotiations have not yet gained speed but the situation has changed much over the last couple of weeks and now the pound looks strong enough to wither any shocks from the negotiations, with the able support of the BOE.

Looking ahead to the rest of the day, we do not have any major news from the UK or the US for today and the key to watch today would be whether the region around 1.3030 is broken through and whether the GBPUSD is able to move cleanly through this region. If it does, it should continue to move higher in the short term.