GBP/USD Daily Fundamental Forecast – September 26, 2017

The pound broke lower during the course of trading as concerns over rising tension and risk in the Korean region weighed on the markets and caused a crash in the stock markets and also caused the gold prices to shoot up. This also made the pound to move through the important support region at around 1.3480 which then led to added selling as panicked traders sought to sell even more on the break of the support.

GBPUSD Falls on Dollar Pressure

This carried the GBPUSD pair towards the 1.3420 region from where we have had a bounce over the last few hours which has since caused the pair to move back towards the support turned resistance at 1.3480 where it rests now as of this writing. Looking back, there was no fundamental news or events concerning the pound that led to this crash but it was more about global events and the fact that the traders seemed to be waiting to sell the euro and the pound and buy the dollar.

Considering this, it may be said that the market would have sold the pound anyway irrespective of what kind of news came along its way. The dollar has been becoming steady over the last couple of weeks as the incoming data has been getting slightly better over this period and we have also seen the Fed make its intentions clear that it has a rate hike in December in its mind. A combination of these events has driven the dollar over the past week or so and this has caused the GBPUSD pair to progressively weaken during this period.

We believe that this pair is set to weaken even more in the coming days though the political strength and acumen shown by May to tide over the Brexit process should help the pound in the medium and long term. With this in mind, we expect the fall in the GBPUSD pair to be slow and steady as the dollar recovers across the board. Looking ahead to the rest of the day today, we have the speech from Yellen later in the day but apart from that, we do not have any other economic event of note, for today.