• GBP/USD seems to have gone into consolidation mode on Monday.
  • Dollar is holding its ground at the start of the week.
  • GBP/USD could face renewed bearish pressure with a drop below 1.3520.

GBP/USD has started the new week in a calm manner after closing the previous week in the positive territory despite Friday's decline. The pair is having a difficult time making a decisive move in either direction early Monday but a drop below 1.3520 could attract sellers.

The heavy selling pressure surrounding the greenback seems to have dissipated following the impressive January jobs report from the US, which did not allow GBP/USD to regain its bullish momentum.

The US Bureau of Economic Analysis reported that Nonfarm Payrolls increased by 467,000, surpassing the market expectation of 150,000 by a wide margin. Moreover, the annual wage inflation rose to 5.7% from 5%, ramping up the 50 basis points March rate hike probability to 30% from 8%. 

Reflecting the positive impact of the labour market data on the dollar, the US Dollar Index (DXY) snapped a five-day losing streak on Friday. The DXY is posting small gains above 95.50 in the European session. 

Meanwhile, cautious remarks on the policy outlook from Bank of England Chief Economist Huw Pill weighed on the British pound as well. "We should not anticipate that rate hikes will be aggressive in the medium-term," Pill said.

The US economic docket won't be featuring any high-tier data releases on Monday but the upbeat market mood could limit the dollar's upside. The UK's FTSE 100 Index is rising 0.4% and the S&P 500 Futures are up modestly.

GBP/USD Technical Analysis

The Fibonacci 38.2% retracement level of the latest uptrend seems to have formed support at 1.3520. In case GBP/USD falls below that level and starts using it as resistance, 1.3500 (Fibonacci 50% retracement, 50-period SMA on the four-hour chart) aligns as the next bearish target before 1.3460 (Fibonacci 61.8% retracement).

On the upside, the initial hurdle is located at 1.3560 (Fibonacci 23.6% retracement) ahead of 1.3600 (psychological level) and 1.3630 (Feb. 3 high).

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


Recommended Content

Editors’ Picks

EUR/USD turns negative near 1.0760

EUR/USD turns negative near 1.0760

The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.

EUR/USD News

GBP/USD comes under pressure and challenges 1.2500

GBP/USD comes under pressure and challenges 1.2500

GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.

GBP/USD News

Gold retreats from highs on stronger Dollar, yields

Gold retreats from highs on stronger Dollar, yields

XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.

Gold News

XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery

XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery

XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation. 

Read more

Week ahead – US inflation numbers to shake Fed rate cut bets

Week ahead – US inflation numbers to shake Fed rate cut bets

Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.

Read more

Majors

Cryptocurrencies

Signatures