GBP/USD Weekly Technical Forecast March 6th – March 10th
GBP/USD suffered one of the work weeks since the beginning of the year as it was hard hit by the dollar strength that has been dominating the markets over the past week. Though the euro has managed to recover somewhat towards the end of the week, the pound still continues to be under a lot of pressure and it looks as though it is set to continue to weaken in the coming week as well as the dollar strength slowly picks up again.
GBP/USD to Continue Under Pressure
Last week we saw the close of one month and the beginning of the new month and as usual, the GBP/USD pair got hit during the first half of the month as the monthly currency flows dominated. This pushed the pair through 1.2300 and the pair has continued to trade below that price region for the rest of the week as well.
The dollar weakened a bit after the speech from Yellen on Friday where she almost confirmed that they would be a rate hike in March but that weakness in the dollar was not enough to help the GBP/USD pair move higher. Unlike most of the other pairs which depend on the relative strength of the dollar to move either way, the pound has its own set of problems and issues to deal with which includes the Brexit process and the negotiations following the invocation and also the rumors of Scottish referendum for Independence. With all this hanging above its head, it would be difficult for the GBP/USD to move much higher and any such move should be viewed as an opportunity to sell.
Looking ahead to the coming week, the annual budget in the UK and the NFP employment report from the US are likely to dominate the moves in this pair and with the NFP coming in strong, as is expected, we could see the pair coming under even more pressure which could place the support region around 1.2200 under great danger.