GBP/USD barreling towards 20-month highs ahead of UK PMI, US NFP
- Sterling continues to gain, capitalizing on USD weakness.
- UK PMI, US NFP releases to pose next challenge for GBP.
- Brexit continues to produce drama, currency markets uninterested.
GBP/USD has been relentless, carving out gains for three straight days and is determined to reach new 20-month highs just beyond 1.4345.
The Sterling has closed higher against the US Dollar for six consecutive weeks, and looks set to do so for a seventh, as confidence in the Greenback continues to recede and GBP bulls continue to shrug off Brexit complications and mixed economic data from within the kingdom.
Sterling confidence will get tested today, with UK Construction PMI data early in the London market session at 09:30 GMT; expectations are for a slight increase in the UK construction sector, and a negative beat could give the bulls reason to pause.
The real fun begins at 13:30 GMT, when the US releases their monthly volatility-inducing Non-Farm Payrolls. A strong enough beat in non-agricultural employment numbers could give the Greenback the push it desperately needs to start clawing back some of the losses it's suffered recently. Enough of a surprise from either UK PMI or US NFP could pull the rug out from under GBP/USD, with so many traders currently piled into the buy side.
Trouble in Paradise: collusion with the EU
The UK has faced a number of challenges from the Brexit media mill; the latest leak stating Brexit advisors to the ruling Conservative party's Theresa May are secretly considering whether Britian could negotiate a customs union deal with the EU, a move that would strip away much of the UK's sovereign operating power post-Brexit, severely limiting the nation's ability to operate freely outside of EU laws. The revelation is sure to rile up Brexit hardliners within the Conservative party, and does little to buy Prime Minister May job security within her own party, with backbenchers in the UK Parliament already rumbling for a no-confidence vote in the sitting PM. The Sterling's faith in absolving itself of Brexit concerns can expect to get tested when the London markets open.
GBP/USD Technical Levels
Price has chattered against yesterday's high of 1.4277 through Asia, and should things go south, buyers can expect support from 1.4195 and yesterday's low of 1.4158. The nearest swing support on H4 charts is miles below, at 1.4025, and the real challenge for price will be to break and stay above last week's swing high of 1.4320.
Today's pivot points:
R2: 1.4350
R1: 1.4304
PP: 1.4231
S1: 1.4184
S2: 1.4111
Author
FXStreet Team
FXStreet
