GBP/USD - lowest daily close since January 23

The overnight hawkish comments from the Fed officials boosted March Fed rate hike bets and strengthened the bid tone around the US dollar.

GBP/USD thus suffered its worst daily close since January 23. The spot closed at 1.2382 and extended losses in Asia to 1.2364 levels. Tuesday’s daily close was also below 50-DMA and 100-DMA seen at 1.2397 and 1.2404 levels, respectively.

It’s all about Trump

The dollar demand is entirely dependent on what Trump says during his budget speech today. Impatient markets need details of the fiscal plan; only then the continuation of the Trump trade appears likely, else there is a risk of a sell-off in the US dollar and other risk assets.

GBP/USD Technical Levels

The spot was last seen trading around 1.2375 levels. A lift above 1.2405 (100-DMA) would expose 1.2442 (5-DMA), above which a major hurdle is seen at 1.25 (zero figure). On the lower side, a breach of 1.2346 (Feb 7 low) would open up downside towards 1.24 (zero figure). A violation there could yield sell-off to 1.2260 (Jan 20 low).