Summary
The previous week was great for the dollar. We saw the greenback taking in gains against all of its counterparts. Expectations for a Fed hike on the 15th of March increased from 40% to 90% the previous week, currently at 79% for a 0.75%-1% increase, amid the comments the Fed officials have been making all along. We might continue to see the March hike get priced in resulting in some dollar strength. From a technical perspective and also using the 10year T-Note as a technical tool, it has been ranging for the past two months between 124.0 and 125.8. Yellen’s comments last Friday were not as hawkish as what most market participants were expecting and they couldn’t have been made at a better time. She mentioned that a March Rate hike is appropriate but that will depend on whether the economy evolves as expected. Of-course that came with this week’s February NFP as one of the measures in mind. It has direct line to rate speculation. As a dollar bull, I feel that it is a bit sensitive at this stage, but there is a balance in both bear and bull opportunities.

GbpUsd Daily Chart

We saw price break the bottom of the range mid-week and finding immediate support at 1.22000. With oversold stochastic and recent 21/55 Moving Averages cross we might see price retrace up to the role reversal or the 21 moving average acting as dynamic resistance before further bearishness on the pair.

GbpUsd H4 Chart

Price opened at a bull area zone at the beginning of the week after failing to make a lower high at 1.22500 at towards the end of the week. Bulls would look for a retracement down to WM2 for solid buying opportunities. This coincides with the role reversal and a 1.22500 psych.

GbpUsd H1 Chart

Price is currently at resistance at DM3. With overbought stochastic, I expect to see price retrace down to make a higher low at the role reversal. There is confluence between DM2 and WM2 at this 1.22500 psych level.

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