GBP/USD Daily Fundamental Forecast – September 18, 2017

The pound continued on its rampant ways as the pair has a range of over 220 pips on Friday on the back of strong fundamentals and news events supportive of the pound in the short term. This helped the pair to break through the 1.35 region and then 1.36 region before correcting lower and moving below 1.36 where it trades as of this writing. The pound continues to remain bullish and with news events scheduled for today as well, expect some more volatility in the pair for today.

GBPUSD Continues to Rocket Higher

The pound had been given a large boost on Thursday by a hawkish BOE and even some strong CPI data from the US could do little to hold back the GBPUSD. It continued to make good progress on Friday as well as the technicals and fundamentals combined to give the pound a good boost. To add to this, we got a weak retail sales data from the US and this was enough for the pair to shoot higher. The underlying strength in the pound had been lurking for the past couple of weeks and it was only last week that the strength took full flight.

The Brexit process seems to be going on smoothly with the UK PM May getting the required approvals from the Parliament and this has been supportive of the pound. The BOE has been so hawkish over the last week that now it seems that it could reflect very bad on the BOE if it does not hike rates in the next couple of months or so. With the dollar continuing on the backfoot, it has been a good time for the pound overall.

We have the BOE Governor Carney speaking later on in the day and the market would expect him to continue to be hawkish and maybe even hint upon a rate hike and if that happens, we could see the GBPUSD testing out 1.37 in the short term and maybe even beyond. Traders would also do well to keep an eye on the dollar which could be on the path to recovery with the FOMC scheduled later in the week.