GBP/USD Daily Fundamental Forecast – July 28, 2017
The GBPUSD pair corrected lower in the line with the rest of the markets as the dollar gained in strength across the board. It is indeed a pity for the bulls that everytime they seem to have made a break through the highs and seem to want to push further, the dollar begins to gain in strength and the upmove fizzles out pretty much quickly. It was the same case yesterday as well as the pair made the break through 1.31 only for fall back.
GBPUSD Awaits BOE Next Week
The early half of the day was marked by the weakness in the dollar but as we had pointed out in some of our earlier forecasts, the strength in the pair was there for everyone to see and it seems only a matter of time for it to break through. The break came after the FOMC minutes when the Fed did not support the dollar by much and this led to a dollar sell off which helped the GBPUSD pair to push through 1.31 and reach as far high as 1.3155. But just when the move seemed to be gaining in momentum, we began to receive a slew of data from the US. The code durable goods data came in much better than expected and the advance trade balance came in with a smaller deficit. This helped the dollar immensely which led to a correction in this pair.
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The pair now sits below the 1.31 with the correction having seen it move towards 1.3060 during the course of the day yesterday. We have the upcoming BOE meeting next week where it is expected that the BOE might indeed hike rates. This expectation is likely to keep the pound buoyed in the leadup to the meeting unless the dollar has other ideas.
Looking ahead to the rest of the day, we have the advance GDP data from the US and if that comes in stronger than expected, then we could see the pair moving towards the buying support region at 1.30 during the course of the day. If it turns out to be weaker, we might see the pair challenging the range highs again.