GBP/USD Technical Forecast March 09, 2017
The GBPUSD pair broke through 1.2200 and weakened further yesterday as the dollar strength dominated the markets. We had been mentioning since the beginning of the year that it was only a matter of time before the dollar began to gain in strength and when that begins to happen, it is likely that all the currencies will suffer and at that point of time, the pound will be the worst hit as it has its own set of fundamental issues that it is yet to sort out.
GBPUSD Suffering the Most
Though the dollar couldnt make much of a break through during the first 2 months of the year, the underlying strength was evident to everyone and it was only a case of waiting for the right moment to get into trades that favor the dollar. The pound has several of its own issues to deal with and thats why we have always been advising in our forecasts that any bounce in this pair should be sold into as the GBPUSD pair is the one that is most likely to suffer.
Even when the pair was above 1.25, we had insisted on going short on GBPUSD and now as the dollar gains ground, we see that the pound has been crashing through 1.23 and now 1.22 on a daily basis and there does not seem to be much hope of a recovery. Of course, there are likely to be bounces in this pair when the dollar corrects but even those bounces are likely to be quickly sold into and will not be a cause to change our bearish outlook on this pair.
Looking ahead to today, we do not have any major news from the UK and we have the unemployment claims data from the US. But with the ADP employment report coming out very strong yesterday, we believe that the dollar strength will continue to dominate the markets today as well and so we should see the GBPUSD pair weakening further towards 1.21.