GBP/USD finds a cushion around 1.2200, downside seems favored as spotlight shifts to US NFP


  • GBP/USD has attempted to build a cushion around 1.2200 after a perpendicular sell-off.
  • Investors are dumping the risk-perceived assets as anxiety among investors is soaring ahead of the US NFP data.
  • The BoE might continue hiking interest rates as UK inflation is extremely stubborn.

The GBP/USD pair has sensed a pause in its vertical downside journey to near the round-level support of 1.2200 in the Tokyo session. The downside bias is the Cable is still solid as the US Dollar Index (DXY) is on the verge of recording fresh gains above the immediate resistance of 101.55.

Investors are dumping the risk-perceived assets as anxiety among investors is soaring ahead of the release of the United States Nonfarm Payrolls (NFP) data. Losses in the S&P500 futures are deepening in the Asian session as investors are getting worried that a fresh interest rate hike by the Federal Reserve (Fed) is escalating recession fears.

The US Dollar Index (DXY) is displaying back-and-forth action after reaching near 101.55 and is expected to extend upside amid the risk aversion theme. The 10-year US Treasury yields are facing sheer pressure and have dropped below 3.38%.

An interest rate hike of 50 basis points (bps) by the Bank of England (BoE) to 4% triggered a sell-off in the Pound Sterling on Thursday. On interest rate guidance, BoE Governor Andrew Bailey confirmed further interest rate hikes as the inflationary pressures are still in the double-digit figure. The central bank announced a tenth consecutive interest rate hike, however, the United Kingdom economy is not responding as expected. BoE Governor further cited that firms are expecting a decline in the employment cost ahead. It is worth noting that labor cost has been a major catalyst of stubborn inflation.

Going forward, investors will see a power-pack action after the release of the US NFP data. Analysts at TD Securities expect a 220K increase in payroll and a modest increase in the Unemployment Rate to 3.6%.

GBP/USD

Overview
Today last price 1.2211
Today Daily Change -0.0027
Today Daily Change % -0.22
Today daily open 1.2238
 
Trends
Daily SMA20 1.2291
Daily SMA50 1.2191
Daily SMA100 1.1797
Daily SMA200 1.1958
 
Levels
Previous Daily High 1.2402
Previous Daily Low 1.2229
Previous Weekly High 1.2448
Previous Weekly Low 1.2263
Previous Monthly High 1.2448
Previous Monthly Low 1.1841
Daily Fibonacci 38.2% 1.2295
Daily Fibonacci 61.8% 1.2336
Daily Pivot Point S1 1.2178
Daily Pivot Point S2 1.2117
Daily Pivot Point S3 1.2005
Daily Pivot Point R1 1.2351
Daily Pivot Point R2 1.2463
Daily Pivot Point R3 1.2524

 

 

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