GBPUSD Under Pressure As Dollar Strength Prevails

The pair moved lower during the course of trading yesterday as the strength in the dollar and the weakness in the pound served a double whammy and the pair crashed through the 1.40 region for much of the day yesterday and it continues to trade in that region as of this writing and looking weak. As we had said before, if the pair manages to successfully breach the 1.40 region and continues to stay below, then the bears are likely to re-establish control.

GBPUSD Down Towards Support

If and when that happens, the pair is likely to come under even more pressure and the prices are likely to move lower in due course of time. The bulls would not want that to happen but so far, they seem to be fighting a losing battle. After few weeks of average data, we are seeing some weak data out of the UK since the beginning of the week. This shows that the UK economy is beginning to creak and this is going to place the BOE in a quandary. Almost all of the PMI data have failed to meet the expectations this week and this only shows the pressure on the UK economy.

It is not yet clear whether this is a result of the Brexit process but just when it was being hoped that all was smooth, we are getting this kind of data and this has brought in uncertainty for the GBPUSD traders. Also, the dollar has been gaining in strength in anticipation of the NFP later in the day today and if this dollar strength begins to pervade in the market, the bears would seize control and we should see the GBPUSD pair make a move towards the 1.28 region.

Looking ahead to the rest of the day, all the focus would be on the NFP and wages data and we will also be seeing speeches from Carney and Powell later in the day which should keep the traders busy.