GBP/USD Daily Fundamental Forecast – March 21, 2018

The GBPUSD has corrected back lower due to the pressure from the dollar which has been growing in strength all across the markets yesterday. The pair is now trading just above the 1.40 region as of now and though there is no danger to the bulls as yet, it remains to be seen who would be in control at the end of the day today.

GBPUSD Corrects Lower

It is likely to be a day of high volatility in the markets as we have the FOMC rate announcement and statement followed by a press conference. It i widely expected that the Fed would hike rates for the first time this year and by all practical means, we believe that this is likely to happen. But whether the Fed would be able to deliver the hawkishness that the market expects is something that is open to question and this is where there is some hope being held out for the bulls in the market.

But this weakness in the dollar, if it does come about, it likely to last only for the short term as the incoming data is likely to take over and dominate the markets and help the dollar. We also have the BOE meeting tomorrow and it remains to be seen whether they are going to be hawkish as well, considering the progress that is being made in the Brexit talks over the last few weeks. If that happens, then we are again going to see volatility.

This is the reason why we have to advise our traders not to assume any outcome or direction and trade what they see. It would serve them well to sit out of the markets till all the dust settles and then choose to trade in the right direction. The FOMC is likely to be the focus for the rest of the day and we should see some consolidation in the lead up to the announcement.