British pound fell dramatically last week, breaking below the 1.3900 mark (lowest since 2010). The cable is losing ground amid increased uncertainty about the June referendum outcome. According to the most recent polls, 38% of respondents support the the Brexit, while 37% prefer to stay in the European Union.
Bearish momentum in GBP/USD remains strong. There are no fundamental reasons for the market to reverse until we reach 1.3500 (2009 low). The pair is clearly oversold, but the market is now moved more by the market sentiment, then by the technical factors. Local resistance is seen at 1.4080.
Economic calendar for the new week is rather light. We’ll watch a block of PMI indices from Tuesday to Thursday. According to the official forecasts, manufacturing and services indices have weakened in February.
You should also remember about the US labor market figures on Friday. This is something that could trigger a bullish correction. Average hourly earnings are expected to have declined.