GBP/USD: A phase of consolidation below 1.2300?

The GBP/USD pair is seen consolidating Friday’s heavy gains and wavers just below 1.23 handle, after having failed several attempts to extend the upside above the last.

Focus on UK’s annual budget, US NFP

The ongoing upbeat momentum seen behind cable lost legs just ahead of 1.23 handle, as the USD bulls jumped back into the bids in Asia, following Friday’s massive sell-off after markets adopted ‘Sell the fact’ strategy in response to Fed Chair Yellen’s clear hint on a March Fed rate hike.

The recovery gains in the GBP/USD pair also remain limited amid risk-off market profile, as investors turn cautious stepping into the NFP week, with the US jobs data release expected to seal in a March Fed rate hike.

On the GBP-side, we have a light calendar this week, although the UK Annual Budget and industrial production figures will hog the limelight. In the meantime, markets look forward to the BOE MPC member Hogg’s speech and US factory orders data due later in the day.

GBP/USD Levels to consider            

At 1.2286, the resistances are lined up at 1.2304/05 (daily high/ Classic R1) and 1.2350/69 (round figure/ 10-DMA) and below that at 1.2400/10 (zero figure/ 50-DMA). On the flip side, the resistances are aligned at 1.2250 (Jan-end) and 1.2212 (6-week low) and below that at 1.2198/97 (Jan 1/ Dec 25 low).