GBP/USD Analysis: Remains confined in a range, UK PMI/US NFP eyed for a fresh impetus

The GBP/USD pair continued with its two-way price action on Thursday, albeit remained well within a familiar trading range held since the beginning of this week. The pair gained some intraday positive traction and refreshed weekly tops, albeit struggled to capitalize on the move and met with some fresh supply near the 1.2475-85 resistance zone amid a strong pickup in the US dollar demand. Following an early downtick, the greenback caught some aggressive bids in the wake of persistent worries over the economic fallout from the coronavirus pandemic. The market concerns were further fueled by a record number of US initial weekly jobless claims, which soared to a massive 6.648 million last week.

Apart from a broad-based greenback strength, the fact that Fitch Ratings estimated that the UK's GDP could fall by close to 4% in 2020 further undermined the British pound and contributed to the pair's intraday pullback of around 75-80 pips. The pair finally ended the day with only modest gains and remained depressed through the Asian session on Friday amid some follow-through USD uptick. Moving ahead, market participants now look forward to the release of the final UK Services PMI for some impetus. The key focus, however, will remain on the closely watched US monthly jobs report (NFP), which will be followed by the release of US ISM Non-Manufacturing PMI and produce some meaningful trading opportunities.

Short-term technical outlook

From a technical perspective, nothing seems to have changed much for the pair and traders are likely to wait for a sustained break through the recent range before positioning for the next leg of a directional move. A sustained strength above the 1.2475-85 hurdle, leading to a subsequent move beyond the key 1.2500 psychological mark might now be seen as a fresh trigger for bullish traders. The pair might then aim towards surpassing the 1.2600 round-figure mark and test the very important 200-day SMA, around the 1.2655 region.

On the flip side, the 1.2300 round-figure mark is likely to protect the immediate downside, which is followed by weekly lows, around the 1.2245-40 region. Some follow-through selling will confirm a near-term bearish break and accelerate the slide further towards the 1.2200 round-figure mark. The momentum could further get extended towards 1.2160 intermediate support before the pair eventually falls to sub-1.2100 levels.