With just over twenty-four hours until George Osborne announces the latest UK budget, GBP/USD has retraced some of its recent falls. The last couple of weeks have seen aggressive dollar strength and GBP/USD had moved heavily into oversold territory. Regardless of the chance that the Federal Open Market Committee might bring interest rate rises forward to June/July, the one-directional move was always due for a correction. The question that really remains is, how long before it starts to selloff again?
The temptation for traders to take some of their short profits off the table while waiting for both the UK and the US to announce major economic statements will no doubt see this correction stretch throughout the day.
Although the current $1.4780 level remains oversold it is hard to see GBP/USD breaking back above $1.5000, and this looks likely to be the top of any further bounce.