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GBPUSD: Breaching below the daily support ahead of NFP

Yesterday the Bank of England (BoE) announced it would hold its key interest rate at a historic low of 0.5%, and keep the size of its quantitative easing asset-purchasing program at £375 billion. Now all eyes turn to the US jobs report today.

Today on the economic agenda from the US the Nonfarm payrolls in February and is estimated to fall from 257K to 240K, but unemployment rate is likely to fall from 5.7% to 5.6% showing a strong labor market.

On yesterday session the GBPUSD fell, breaching below the daily support at 1.5237 and close near the low of the day. The pair is in a potential phase change from recovery to bearish, trading below the 50 day moving average. The stochastic in showing an oversold market but even with the pair well into oversold territory, we should not fight the strong downward trend just yet.

Expecting downward move to a key level at 1.5105 on a break below previous day low at 1.5214 (scenario 1) or a break above previous day high at 1.5269 could pull the pair back up to 1.5351 (scenario 2).