GBPUSD Daily Fundamental Forecast – February 20, 2017
GBPUSD continues to consolidate within a tight range but it looks to be under some pressure as of this morning. The upper house of the UK Parliament is set to debate the invocation of Article 50 and this is set to be a 2 day affair. Though we do not expect any major surprises from this debate, it is going to ultimately culminate in the actual invocation and once that is done, there is no going back for the UK as far as the Brexit process is concerned. This could be slightly disappointing for some of the bulls as they are then likely to be exposed to a lot of uncertainty and risks as the talk over the Brexit process begin between the UK and the Eurozone leaders.
What this would also mean is the fact that the control of the process would be firmly vested back with the UK government and hence a chosen few and this is likely to make investors uncomfortable as it leaves little room for maneuvering as such. So, we expect all the bounces in the GBPUSD pair to be met with some strong selling today and for the next few days as well and this should keep the bounces limited. We expect the pair to be under continued pressure in the short and medium term as well as the negotiations begin over the Brexit process and it is likely to be a long draw out affair with many ups and downs along the way and the markets hate uncertainty.
Looking ahead to today, we do not have any major economic news from the UK and it is a holiday in the US today. Hence we can expect some more consolidation and ranging for the rest of the day with a bearish bias which should keep both sides interested.