GBP/USD Daily Fundamental Forecast – September 5, 2017
The GBPUSD pair has been in a state of consolidation over the last 24 hours as the holiday in the US yesterday dried up the liquidity in the markets and hence led to range trading in most of the pairs. But we believe that the pound is likely to be weak in the short term and with the ceiling coming up very close in the 1.30 region, it would take a lot of effort from the bulls to make any kind of an upmove possible in the pair.
GBPUSD Likely to Remain Weak
The pair spent most of the day yesterday within a 50 pip range which is understandable considering that it was a Monday and with not much of news around. The continued tension in the Korean region has ensured that the attention is focussed on the stock markets and gold, as far as the markets are concerned, and led to a neglect of the other markets and the holiday in the US has also ensured that the low liquidity led to some very low volatility in the markets yesterday. There was a little bit of two way movement in the pair but with no specific direction.
We expect this kind of consolidation to continue for the day today. The construction PMI data was released from the UK yesterday and it came in almost along the lines of expectation and hence it did not lead to too much of volatility in the GBPUSD pair. All eyes would be on the dollar in the short term as the data continues to flow from the US and the traders and investors would be using the data to gauge the short term direction for the dollar.
Looking ahead to the rest of the day, we have the services PMI data from the UK and we have speeches from some of the Fed members in the US and this is likely to bring in some more volatility in the pair. We believe that the GBPUSD pair is likely to be capped for now and would likely drop down to the 1.2860 region during the short term. A break of that should open up 1.28.
This article was originally posted on FX Empire