- GBP/USD failed to capitalize on its early uptick on Thursday amid resurgent USD demand.
- Concerns over the economic fallout from the coronavirus pandemic underpinned the USD.
- Friday’s key focus will be on the UK Services PMI and the closely watched US NFP report.
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.
-637214929227285759.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.