GBP/USD Daily Fundamental Forecast – September 21, 2017
The GBPUSD pair had a highly volatile and choppy day of trading yesterday which was expected, as there were important news events lined up in the UK as well as the US yesterday. It was a difficult day of trading for the traders as they had to deal with two way action that was based on news events and fundamentals which pushed the pair back and forth. But after all has happened, we see that the pair is now much lower than where it started the day and it looks as though it would go lower still.
GBPUSD Moves Lower on Stronger Dollar
Though the focus of the markets, since the beginning of the week, had been firmly on the dollar and the Fed as the markets awaited the FOMC, the pound had to deal with its own piece of important data as the retail sales data came in during the London session. The data came in at a much stronger than expected value of 1% when the expected value was only 0.2% and this led to a strong bullish run in the GBPUSD pair which pushed it above 1.36 towards its range highs. But the move was brief as the BOE Agents Report came in which showed a weakening demand across many sectors. This immediately reversed the move up and the pound fell back to its opening levels.
Then came the FOMC late in the day where the dot plot showed that many Fed members were clearly leaning towards a rate hike in December. This is all that the dollar bulls wanted to know and they showed their appreciation by buying the dollar across the board. This led the GBPUSD pair to crash through 1.35 and it trades just below that, as of this writing.
Looking ahead to the rest of the day, we do not have any major news from the UK and so we can expect a bit of consolidation in the pair with a bearish bias. We believe that the GBPUSD pair would continue to be bearish in the short term as the dollar continues its bullish recovery.
This article was originally posted on FX Empire