GBP/USD Daily Fundamental Forecast – March 1, 2018
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The GBPUSD pair continued to weaken during the course of the day yesterday and has since broken through the 1.38 region which means that the pair could now well move to the 1.35 region. The strength of the dollar all across the board has been the main reason for the move lower and this is likely to continue in the medium term.
GBPUSD Falls Through 1.38
Also, the pound usually tends to be affected a great deal by the month end currency flows and we are sure that this also had an effect in the weakening of the pair over the last couple of days. We might see a relief rally sometime in the short term but it is clear that the bears are in control in this pair as the dollar strength is here to stay. So any kind of corrective rally higher should be met with selling and we believe that the strong support region of 1.35 should be the next target of the bears.
The dollar has been strengthened by the increased prospect of quick rate hikes from the Fed which is supported by the incoming data. Many of the Fed members have also expressed their wish for the same and with the new Fed Chief Powell also joining the bandwagon in his testimony a couple of days back, the dollar bulls have been ruling the roost since then and this is only likely to increase in the coming weeks. We had the advance GDP data from the US yesterday which came in largely as per expectations.
Looking ahead to the rest of the day, we have the manufacturing PMI data from the UK and we have another testimony and ISM manufacturing info from the US. Both of these data are likely to have an impact on the markets but as said before, any move higher in the pair should be viewed as an opportunity to sell.
This article was originally posted on FX Empire