Yahoo Finance GBP/USD Daily Fundamental Forecast – January 23, 2018
The pound rose higher yesterday in a continuation of its dramatic bull run that has been going on for over a month now with not much of a correction as yet. The pair has risen by around 500 pips over the period of a month and today morning, we saw the pair make a small peek above the 1.40 region which should now lay the base for the GBPUSD pair to continue higher.
GBPUSD Touches 1.40
The pair has been making significant gains over the last month or so due to the weakness in the dollar and also due to the strength of the pound as well. The reasons for the weakness in the dollar has been well documented but the strength of the pound is mainly due to the expectations that the UK would have a soft Brexit which would mean that it would continue to have some strong trade access to the Eurozone which is very important for the UK economy.
To add fuel to the fire, late yesterday, we saw the British press report that the UK is likely to have a Brexit in which the status of the UK would be similar to what Norway is having. This would mean that the UK would have total trade access to the Eurozone markets which is what UK wants. Though there has not been much basis to these reports and these are likely to be denied by the leaders later today, the market always tends to overrun the news and it is unlikely to wait till an official announcement comes in. So, we should see the pound continue to trade in a strong manner today.
Looking ahead to the rest of the day, we do not have any major economic news from the US or the UK and hence it is likely that the pound would be driven by the news of Brexit which should be positive for the pound overall. We had said in our forecasts that the region of 1.40 would only be a matter of time and now that it has been achieved, we should see the pair move higher still.
This article was originally posted on FX Empire
