• GBP/USD slips from five-month high amid fresh US dollar buying.
  • Market sentiment turns sour with American deadlock over stimulus, US-China, Washington-Ottawa tussles add worries to market.
  • BOE left monetary policy unchanged with upward revision in GDP but Governor Bailey struck cautious statements.
  • Brexit, coronavirus, aid package can offer intermediate entertainment, US jobs report will be the key.

GBP/USD prints 0.28% loss as sellers cheer the latest drop to 1.3105 while heading into the London open on Friday. Even if American Congress gets adjourned for the week without any decision on the much-awaited stimulus, US dollar gains ahead of the key employment data portray the pair’s weakness. It’s worth mentioning that the BOE’s upbeat performance and worries over the US stimulus helped the Cable to refresh five-month high the previous day.

Democrats and Republicans couldn’t gel even for the benefit of the nation. Though, US President Donald Trump has already threatened to use executive powers to make way for these benefits. The policymakers not only failed to offer details of the much-awaited coronavirus (COVID-19) phase 4 aid package but also disappointed unemployed people over the jobless claims. As a result, the Republican leader of the Senate, Mitch McConnell, pushed policymakers towards attending negotiations for the aid bill during the generally observed August vacation.

Other than the stimulus headlines, the coronavirus (COVID-19) woes and the jitters over the Brexit, not to forget fresh trade war signals, also drag the GBP/USD prices down. Further, the US dollar pullback from over two-year low adds to the pair’s weakness. The US dollar index (DXY) gains 0.32% to 93.09 by the press time. The greenback gauge dropped to the fresh lows since May 2018 the previous day.

On Thursday, the BOE kept monetary policy unchanged with a 0.10% interest rate and held the Quantitative Easing (QE) program unchanged £745 billion. However, the “Old Lady” upwardly revised the GDP figures while also cutting its Unemployment and Inflation targets for the short-term, which in turn helped the quote to remain strong. In doing so, the pair ignores worries conveyed by Governor Andrew Bailey and fresh woes over the London’s financial gateway status.

Market’s risk-tone remains sluggish with S&P 500 Futures declining near 0.50% to 3,330 while stocks in Asia-Pacific also turn red as we write.

Moving on, the July month’s employment data from the US will be the key due to the latest weakness in early indicators. Forecasts suggest the headlines Nonfarm Payrolls (NFP) to weaken to 1600K from 4800K prior whereas Unemployment Rate may ease to 10.5% from 11.1%.

Read: Nonfarm Payrolls Preview: Hints point to an awful July

Technical analysis

Failures to provide a daily closing beyond an eight-month-old resistance line joins overbought RSI and sluggish MACD to direct bears towards 1.3000 round-figures and the weekly low around 1.2980. On the upside, a clear break above the mentioned resistance line, currently around 1.3180 will need validation from the 1.3200 threshold before attacking the yearly top near 1.3265.

Additional important levels

Overview
Today last price 1.3108
Today Daily Change -34 pips
Today Daily Change % -0.26%
Today daily open 1.3142
 
Trends
Daily SMA20 1.2825
Daily SMA50 1.2642
Daily SMA100 1.2475
Daily SMA200 1.2709
 
Levels
Previous Daily High 1.3186
Previous Daily Low 1.3112
Previous Weekly High 1.317
Previous Weekly Low 1.2782
Previous Monthly High 1.317
Previous Monthly Low 1.236
Daily Fibonacci 38.2% 1.3158
Daily Fibonacci 61.8% 1.314
Daily Pivot Point S1 1.3108
Daily Pivot Point S2 1.3073
Daily Pivot Point S3 1.3034
Daily Pivot Point R1 1.3181
Daily Pivot Point R2 1.322
Daily Pivot Point R3 1.3255

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD extends recovery above 1.0350 ahead of EU inflation, Powell

EUR/USD extends recovery above 1.0350 ahead of EU inflation, Powell

EUR/USD is extending recovery gains above 1.0350 in the early European morning this Wednesday. The US Dollar retreats further amid a better market mood. All eyes remain on the Eurozone inflation, US ADP and Fed Chair Powell's speech. 

EUR/USD News

GBP/USD recovers from 1.1940 as US Dollar refreshes day’s low, Fed Powell’s speech eyed

GBP/USD recovers from 1.1940 as US Dollar refreshes day’s low, Fed Powell’s speech eyed

GBP/USD has sensed responsive buying action around 1.1940 as risk aversion loses luster. The Bank of England is expected to advance its interest rates to 4.25% in Q1CY2023. GBP/USD has gained strength after testing the 200-EMA around 1.1960.

GBPUSD News

Gold bulls seek validation from $1,760 and Fed Chair Powell

Gold bulls seek validation from $1,760 and Fed Chair Powell

Gold price remains firmer for the second consecutive day, bounces off 10-DMA, short-term key support. Fed Powell’s first speech after November, hawkish hopes tease Gold sellers.

Gold News

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Bitcoin price action has spiked 5% over the last 24 hours, hinting at the start of an optimistic scenario. Previous publications have already explored why BTC is ready for a bear market rally from both short-term and long-term outlooks.

Read more

Eurozone Inflation Preview: EUR/USD fate hinges on confirmation of peak inflation Premium

Eurozone Inflation Preview: EUR/USD fate hinges on confirmation of peak inflation

ECB President Christine Lagarde told European lawmakers on Monday that Eurozone inflation hasn’t peaked after reaching the highest levels on record in October. Will the Preliminary Eurozone inflation print confirm a peak in inflation?

Read more

Forex MAJORS

Cryptocurrencies

Signatures