Yahoo Finance GBP/USD Daily Fundamental Forecast – February 19, 2018
Like the euro, the pound also had a very volatile day on Friday as the first half of the day was marked by dollar weakness and the second half of the day was marked by strength from the dollar which helped to reverse the gains in the pound over the couple of days before that. It helped the pair to close the week in a weak manner and this points to further correction in the coming days.
GBPUSD Choppy
The pound had been saved by the weakness in the dollar and this had helped the GBPUSD pair to climb from the 1.38 region through the psychologically important region of 1.40 and for a brief while, it looked as though the pair was out of the woods for good and that the pound bulls would be able to build on the momentum to continue to push it higher in the short term. But just as the fall in the dollar did not have much of fundamentals or economic data weakness to back it, the rebound in the dollar also came through without much of the fundamentals backing it.
This led the pound lower back through the 1.41 region and for a very short while, it did trade below the 1.40 region but later on, managed to close the week above it. It continues to trade above that region as of this writing and this price region is likely to be the line in the sand as far as the bulls and the bears are concerned. As long as the pair manages to stay above 1.40, we should see the bulls in control and vice versa. We should know about that in the coming week.
Looking ahead to the rest of the day, we do not have any major news from the UK while it is a bank holiday in the US for today. So we can safely expect some consolidation and ranging as the traders wait for the bigger investors to show their hand and begin the push in a specific direction so that they can tag along. We continue to believe that the dollar would strengthen in the medium term.
This article was originally posted on FX Empire
