GBP/USD Daily Fundamental Forecast – February 23, 2018
The GBPUSD pair continues to struggle on either side of the 1.40 region and the more time it takes to make a clean break back through this region, the more likely it is that it will come under a lot of pressure in the days ahead. Under these circumstances, the traders are adopting a wait and watch attitude and that is one of the reasons for the consolidation that we are seeing now.
GBPUSD Consolidates Around 1.40
The pair did try and make a break through the 1.40 region yesterday but that was met with some quick selling which pushed it back below that region and that is where it is trading at this point of time. It remains to be seen how the pound will be able to gather strength and move ahead in the midst of strength in the dollar as well. The pound has been trying to make its move over the last few days but has been unable to do so.
The pound is supported by a hawkish BOE which has made its intentions clear that it could push on with rate hikes as and when it is needed. The Brexit process has also been proceeding in a steady manner despite the bumps along the road and this has also been helping the pound to gather strength over the last few weeks. On the other hand, the dollar has been buoyed by a hawkish Fed which seems to be bent on hiking rates at a good pace through the course of the year, in fact, the pace suggested by the hawkishness of the minutes shows that the Fed could even be looking to hike rates more than 3 times this year.
This is something that is positive for the dollar and that is the reason why we are seeing a battle between the bulls and the bears in the pair over the past few days. Looking ahead to the rest of the day, we do not have any major economic news or data from the US or the UK and hence the consolidation and the battle around the 1.40 region is set to continue in the short term. Only when this is decided one way or the other, will we be sure of the trend for the short term.
This article was originally posted on FX Empire
