GBP/USD Daily Fundamental Forecast – May 23, 2017

The GBPUSD pair continued to remain sober and traded within a tight range, not willing to join the party against the dollar. It was further hit by news of a bomb blast in Manchester late in the night, which has left 19 dead and more than 50 injured in what is presumed to be a terrorist attack. Though the immediate reaction of the pound to this news has been a bit subdued, it has certainly placed the pair on the backfoot and it is unlikely to make any bullish moves on the back of this news dominating the headlines for today.

GBPUSD Under Pressure

Yesterday morning, the pair began weakly on the back of reports over the weekend that said that the UK might walk out of the Brexit negotiations if the Euro leaders place too many strict conditions. These kinds of rumors and reports are likely to keep the pound under pressure as we enter a crucial geopolitical phase in the UK in the form of elections in June and the Brexit talks soon after.

But the GBPUSD pair did manage to recover during the London session to move back above 1.30 and challenge the range highs at the 1.3030 region once again before it was met with another round of selling which pushed the pair back towards 1.30 once again. It now trades below 1.30 on the back of the Manchester news and we expect the pair to continue to be under pressure during the course of the day.

Looking ahead to the rest of the day, we do not have any major news from the UK and we have a couple of Fed members making a speech today, later in the day. The terrorist attack is likely to dominate the morning headlines in London and hence, we can safely expect the GBPUSD pair to consolidate on either side of 1.30 with a bearish bias.