GBP/USD Daily Fundamental Forecast – September 20, 2017

The GBPUSD pair continued to consolidate after all the action that we had seen in the pair over the last week. It is natural for the traders to look to take some profits and for the bulls to make sure that they pick up some more as the prices move lower and this has led to the range action over the last 24 hours. With news from the UK and the US being important today, it is only natural for the traders to adopt a wait and watch attitude.

GBPUSD Likely to be Choppy

The pound has been one of the strongest currencies around over the past week as a combination of improving fundamentals and strong technicals has helped the GBPUSD pair to move higher during this period. The pound has been helped by the fact that the Brexit process has been moving smoothly and steadily within and outside the UK. Important bills related to the Brexit process have been smoothly passed by the UK Parliament and there has not been any hiccups along the way.

Technically also, the break through the long time range top in the 1.3250 has encouraged the traders to believe in the bullishness of this pair and start buying it more and more and this has also helped to fuel the uptrend so far and the pair continues to trade strongly near the highs of its new range.

Looking ahead to the rest of the day, we have the retail sales data from the UK which is likely to bring in quite a bit of volatility and we have the even more important FOMC announcements from the US later during the US session. The market expects the Fed to be hawkish and keep the door open for a rate hike later in the year, which should be in December, and if the Fed does signal so, then we could see a strong recovery in the dollar in the short term which should push the GBPUSD pair back towards the resistance turned support at 1.3250. If the Fed isnt hawkish, then the dollar would be clearly on the backfoot which would push the pair towards 1.38.