GBP/USD Daily Fundamental Forecast – November 24, 2016

As mentioned in our forecast yesterday, the pound seems to be the only currency that seems to have stood up well against the onslaught from the USD strength which has basically swamped all other currencies and other instruments before it. It is the only currency that has moved higher against the USD since the end of the US elections and it continued to prove its strength yesterday as well, when the USD gained against other currencies in its latest show of strength.

The pair was consolidating and ranging for a large part of the day but when the US session began, the USD strength picked up and it became more and more as the economic data from the US like the Durable Goods data started coming in much better than expected. The GBPUSD pair briefly crashed towards 1.2350 on the back of this strength but it recovered quickly and managed to break back through 1.2400 and sits just below 1.2450 as of this writing. The pound continues to look strong and if and when the USD strength wanes, nothing runs forever, we could see this pair really sky rocket towards 1.26 and further.

The FOMC minutes that were released late yesterday more or less confirmed the rate hike in December as it talked about how the members felt the need to hike relatively quickly. This was what was expected from the minutes and so this did not bring in much volatility to the markets. Looking ahead to today, there is not much news from the UK or the US scheduled to be released today and so we can expect some consolidation in this pair with a bullish bias keeping it above 1.2400. There seems to be growing confidence in the pound and with the Brexit process taking its usual course and also taking its own sweet time to come to fruition, the pound has got a brief breather which it is making use of fully.