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GBP/USD Daily Fundamental Forecast – May 26, 2017

By:
Colin First
Published: May 26, 2017, 03:54 UTC

The theme in the markets over the last 24 hours has been the continuing strength of the dollar across the board. We had also been mentioning over the last

GBP/USD Daily Fundamental Forecast – May 26, 2017

The theme in the markets over the last 24 hours has been the continuing strength of the dollar across the board. We had also been mentioning over the last few days that the pound is likely to be the weakest in such a situation as the bulls struggle to keep the GBPUSD pair afloat. This is seen in the several attempts that they have made in the 1.3030 region and their repeated failure to break through this region even at time when the dollar was clearly on the backfoot. This just shows that the bears are gaining a upper hand in the battle to gain control over this pair.

GBPUSD Falls Through Further

But so far, the fall has been slow and steady and we have not seen a huge slump as some part of the market would have expected to happen. But we can also see that the corrections are getting deeper and deeper while the bounces are getting less and less profound, all of which are signs that the uptrend is slowing down and the bears are taking over. Over the last 24 hours, the pair could not even get near the 1.30 mark as the dollar gained strength on more and more pricing in of a June rate hike in the US.

GBPUSD Hourly
GBPUSD Hourly

We have also had some members of the Fed talk up the possibility of a rate hike in June and we had the FOMC minutes mention the same, with a rider that it would depend on the incoming data. So, the market, which had begun to price out the rate hike last week on the face of political turmoil in the US, has begun to price it in again and thats why we are seeing the dollar gain strength.

Looking ahead to the rest of the day, we have the durable good and Prelim GDP data from the US and no data from the UK. We expect the GBPUSD pair to continue to be under pressure during the course of the day.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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