GBP/USD Daily Fundamental Forecast – September 14, 2017

The pound could not sustain its move above the 1.33 region that it has made on the previous day as it crashed lower yesterday and moved below the resistance turned support region of 1.3250 and trades in a weak manner due to the recovery in the dollar across the board. The pound had looked to break out of its large range and the strong data from the UK seemed to have helped it to achieve that but turned out to be a false dawn for the bulls.

GBPUSD Fails to Hold on To Gains

The dollar recovered all across the board yesterday as the market seemed to appreciate the efforts of Trump in reaching out to the opposition in a bid to try and get his plans pushed through. The market is now hopeful that he would be able to push through his tax reform and healthcare reform bills with the support of the Democrats and that has helped the dollar to move higher over the last 24 hours.

But the weakness in the pound had set in earlier in the day when the earnings index data from the UK came in weaker than expected. This took out some of the wind out of the sails of the pound bulls and pushed the GBPUSD pair towards the support at 1.3250 and once the US session began, the dollar buying seemed to be too much and it now trades at the 1.32 region looking pretty weak.

It could yet turn out to be a very volatile day of trading for the pair today as we have the BOE rate announcement and statement and the market expects the BOE to be hawkish and make its intentions clear that it would be ready to act with a rate hike as and when it is required. We also have the CPI data from the US a bit after that and this should also bring in a lot of volatility as it will give a glimpse of the US inflation and tell us whether the economy continues to recover.