GBP/USD Daily Fundamental Forecast – September 4, 2017

The GBPUSD pair moved higher during the course of the day on Friday, largely due to the weakness in the dollar but it is clear that the pound is not out of the woods as yet and it continues to remain under pressure in the short and medium term as well. The uncertainty and the risk around the Brexit process seems to be too much for the pound to shrug off anytime soon and though the talks have been progressing, no decision has been arrived as yet and this indecisiveness has been haunting the pound.

GBPUSD Moves Higher on Weak NFP

On Friday, the focus was on the dollar with the NFP and the wages data scheduled to be released. A part of the market believed that the data would come out weak, despite the strong ADP data and they were proved right as both the NFP and the wages data came in weak while the NFP data for last month was also revised lower. Due to some quirk in the way that the NFP data is collated, the data for the month of August almost always tends to be weaker than expected but this was enough reason for the dollar bears to begin another round of dollar selling.

This helped the GBPUSD pair to climb through the 1.29 region and it managed to cling on to the gains till the end of the day and it continues to do so today morning as well. But the rise has not been very high and neither has it been smooth and with the glass ceiling just above at the 1.3030 region, we do not expect the pair to move to too high from here. The pressure is on the pound and it could only be a matter of time before it moves back lower.

Looking ahead to the rest of the day, we have the construction PMI data from the UK while it is a holiday in the US. With the tension around North Korea rearing its head again, it is going to be a day of consolidation with pressure clearly on the GBPUSD pair.