GBP/USD Daily Fundamental Forecast – November 28, 2016

This morning has seen some serious USD weakening on the back of news on Friday evening that the Democrats are going to challenge the results of the US elections from the state of Michigan. This is likely to be followed by similar challenges in the states of Pennsylvania and Wisconsin during the course of this week. This will force a recount in the states which is then likely to take a week or more to complete and though the experts believe that it is unlikely to change anything, the markets anticipate uncertainty and risk. If there is one thing that the markets hate, its uncertainty. This uncertainty was the reason for the large fall and weak trading in the GBPUSD pair ever since the Brexit vote as the market was not sure how the process would happen.

Now this uncertainty around the US elections has weakened the USD and has led to some much needed correction in the dollar strength. This weakness has seen the pair break through 1.2500 and we are likely to see an attempt being made at 1.2600 sooner rather than later. As many pairs have run up very high against the USD early morning, we might see a bit of a correction during the course of the day but we believe that USD weakness would dominate the headlines of the markets during the week, atleast until the NFP report is released on Friday, which is likely to throw a better light on the US economy.

Looking ahead to today, we do not have any economic news being released from the US or the UK but we have the traders in the US returning from their Thanksgiving holidays which would add to the liquidity and the volatility in the markets. We advice traders of this pair to look for strong support regions to go long on this pair with tight stop losses, during the course of the day as the USD weakness is likely to dominate today.