The GBP/USD pair fell during the Friday session as the United States released a better-than-expected nonfarm payrolls number for the month of February. The release stated that the Americans added 265,000 jobs the labor force during the month, and as a result there were more people willing to invest in the United States. In fact, a scant 10 minutes after the announcement was made, this pair had fallen 100 pips.
What's even more important is that the move lower broke the 1.50 support level in this market, opening the door too much lower pricing. The 1.50 level had acted as stubborn support over the course of the last several sessions, and of course always going to have some significance based upon the fact that it is a large round number.
There of course was a bounce during the session, but the sellers stepped back in and the Americans kept pushing the price lower. By the time we close up the session on Friday, we were just above the 1.49 handle.
Continued Pound Weakness
The British pound looks weak against almost every other currency out there at the moment, so there is no reason to think that this market will do any different. In fact, there is quite a bit of Dollar strength out there at the moment, and is not predicated on the fear trade from one. It's an actual fundamental agreement that the United States is one of the few places in the developed world at the moment that is growing at a predictable and stable rate.
With this being the case, it's hard to believe that the Dollar will weaken against the Pound anytime soon. Although I see quite a bit of noise below, I think that this market is primed to head towards the 1.45 level and should be sold every time it rallies. With the Bank of England seemingly painted into a corner, it appears that the markets are anticipating the inevitable quantitative easing having to come out of London. That being the case, it may be a while before we see any serious recovery in this market.