GBP/USD Daily Fundamental Forecast – July 13, 2017

The GBPUSD pair continued to stay under pressure for most of the day yesterday before a late recovery helped to push it higher near the 1.29 region and helped it to end the day in a respectable manner. We have been mentioning that the pound is likely to be one of the most weak currencies going around and the events over the past few days continue to prove that. But, on the other hand, we are seeing sparks of a recovery and it remains to be seen what will help it to convert that into a full recovery.

GBPUSD Recovers

Some dovish comments from the BOE member Broadbent put the pair under pressure in the early morning trading and this along with some strong selling in the GBPJPY pair helped to push the pair towards the 1.28 region and it is from here that the pair began its recovery during the second half of the day. The BOE has been doing well to support the pound as much as it can and that is why the market was caught by surprise when the BOE member did not sound as hawkish as he was expected to.

This was shrugged off once the average earnings index data came along, as per expectations and this gave the pound the boost that it needed and the recovery began and continued late in the day as well. Yellen speech was the key event for the day but it came and went and there was nothing hawkish in what she specified and this led to another round of selling of the dollar across the markets. This helped the GBPUSD pair to recover further during some late trading and pushed it towards the 1.29 region late in the day. There are some clear sparks of recovery in the pair and the traders would do well to take note of it.

Looking ahead to the rest of the day, we do not have any major news from the UK while we have the PPI data and Yellen testimony later in the day. Both of these events are likely to bring in volatility but with the region around 1.28 showing some strong buying support, we should have an interesting day of trading ahead.