GBP/USD Daily Fundamental Forecast – March 10, 2017

The GBPUSD pair did not do much work yesterday, choosing to live in the shadow of the bigger brother in EURUSD. All the action was in the euro and the pound just chose to feed off the action. What should keep the bulls interested is the fact that the pair rose from its bottom as a result and though the close was a weak one, it should give some strength to the bulls going into the bigger battles ahead for the rest of the day.

GBPUSD Gets a Lift from the Euro

Yesterday, the GBPUSD pair was wallowing in the low 1.2100s and looking increasingly weak. But the dollar had a mixed day yesterday, rising against a few currencies and falling against a few others and the euro also had a good day against the dollar as the ECB sounded hawkish, for a change. This helped the pound as well as it rose through 1.2150 and went close to breaking the resistance at 1.2200 before falling back towards the end of the day.

It was a promising close for the pair yesterday but with the NFP scheduled to release today and with the numbers expected to come in very strong, the pound is likely to be on the backfoot. Even if the numbers come in weak, it might cause a bit of a bounce which, we believe, will be quickly sold into and hence, the bulls would be wary of committing themselves too much even if the numbers come in weak.

Though the manufacturing production data will be released today in the UK, it is likely to have only a small impact with the NFP scheduled to release later on in the day. The downside sees support coming in at 1.21 while the upside sees resistance coming in at 1.22. If 1.22 does break on weak NFP data, then the traders should try and use that to sell the bounce at the right region as the GBPUSD pair is likely to come under pressure once again pretty soon.