GBP/USD Weekly Analysis for March 8-12

Dollar has been gaining strength, no, thanks to the increase in bond returns. In as much as Britain has been campaigning strongly as regards Corona vaccination, the pounds Sterling has lost substantial strength as the market continues fearing tax increment.

The US inflation rates have been subjected to scrutiny as the country plans voting for its fiscal stimulus. The GDP of UK, however stands out.

The strength of the greenback having been traced to the higher yields of 10 year plan as the world‘s reserve currency has been increasing whenever the world’s standard leaped over 1.5%; it however, retreats when it dives to 1.4% region. This is because investors have been monitoring data released by Fed and other developments.

The Head of the Federal Reserve, Jerome Powell opined that the surge in the greenback caught his attention. The banks, however saw this as symbolizing improved economy and prospects. The reluctance of Jerome increased the dollar, crushing GBP/USD under 1.40.

Rishi Sunak, the UKs Chancellor of Exchequer through presenting hike of corporate tax, succeeded in preventing the Sterling firm falling further. His provision of incentives for various investors was lauded.

After 15 million UK citizens were hit by the pandemic as of February 15, there has been reduction in the pace with which people are immunized. Thus, analysts are of the view that if the normal pace is returned to, the UKs pounds will gain strength while if it experiences bumps on its way, it would shrink further.

Andrew Bailey, the Bank of Englands Governor will be speaking in the week and would disclose the true state of things for the bonds. This is however, not much of an issue as the UK government are bent in balancing the budget. Another important event this week is the release of figures for January Gross Domestic Products.

In US, President Joe Biden is almost at the point of vaccinating over 100 million Americans after 100 days of assuming leadership. After the trouble caused by the devastating effect of the storm, further vaccination of the populace will greatly improve the market.

Technical Analysis

An overview of the daily chart shows that pound/dollar has been benefiting from the surge in momentum which is quite above the 200-day, 100-day and 50-day SMA.

These upward trend is seen despite recent challenges such as failure in rising beyond the upward resistance level of February.

The support level is pegged at 1.3865 which held the currency pair early this month. Another strong level is the 1.3750, which stopped Cable in January. It was also where the price got hit by 50-day SMA. Levels 1.3565 and 1.3510 should also be monitored closely.

There is also resistance pegged at 1.4015 which swung high at this months beginning. 1.4140 is the subsequent figure which acted as support in February.

Sentimental Analysis

Jeromes reluctance to act is likely to continue affecting the market throughout this week. This will strengthen the greenback while other forces will be subdued. Thus, GBP/USD has plenty rooms to continue its downward movement.

According to poll carried out, experts view the downward movement as having gone beyond expectations –thus, a gradual rising should be expected. In as much as the short term has been following a downward trend, median and long-terms have not changed since the previous week.