GBP/USD Daily Fundamental Forecast – May 22, 2017

We have been mentioning over the past few weeks that despite the fact that the GBPUSD pair seems to be in the firm grip of bulls, it is also likely to be the pair that will be the most difficult to trade in the upcoming weeks as there are a lot of risk events involved with the pound in the coming weeks and months. The risk events start with the UK elections next month and though, for now, it is clear that the UK PM May would win with a good majority and take strong control of the Parliament, it is a long time between then and now and anything can happen in between.

GBPUSD Likely to be Volatile

The opinions and rumors have already started with respect to the polls and various pollsters have started posting their opinion polls and these could pull the pound this way and that depending on which way the opinion polls go. If this were not enough, the UK elections are likely to be quickly followed by the start of the talks between the Euro leaders and the UK leaders and that is likely to be a roller coaster ride with each side not willing to budge an inch, at this point of time.

In this case as well, talks have already started about how the UK is likely to walk out of the talks if the Euro leaders are very tough on their terms for exit. It is reports and rumors like these that are likely to keep the GBPUSD volatile in the coming weeks and it is these that have made the pair rock back and forth by around 40 pips since today morning.

Looking ahead to the rest of the day, we do not have any major economic news from the US or the UK for the day but we have the UK PM May making a speech later in the day. The uptrend is likely to be intact to begin the week and we can expect some consolidation with a bullish bias.