GBP/USD eyeing test of March’s 1.3000 lows as buck ends week on the front foot

• GBP/USD is ending the week on the back foot and eyeing a test of March lows in the 1.3000 area.
• The US dollar continues to advance as US yields surge following this week’s hawkish Fed vibes.

As the US dollar heads into the end of the week firmly on the front foot as US yields continue to press higher in wake of this week’s hawkish Fed minutes/policymaker commentary, GBP/USD looks on the verge of breaking below 1.3000. At current levels in the 1.3020s, the pair is trading with on the day losses of about 0.3% and eyeing a test of March lows at pretty much bang on the 1.3000 mark. On the week losses stand at around 0.7%, with the 21-Day Moving Average (currently in the 1.3110s) continuing to offer strong resistance, as has been the case over the past three or so weeks.

As market participants continue to up their hawkish Fed bets, spurring even greater strength in the US dollar, and as analysts become ever more wary on the ability of the BoE to live up to tightening expectations following recent more dovish commentary, many think GBP/USD is at risk of a bearish breakout. From a technical perspective, a break below 1.3000 would open the door to a run lower towards November 2020 lows in the mid-1.2800s. Below that are the September 2020 lows just under 1.2700.