GBP/USD: Greenback’s profit booking gains attention over Brexit noise, 1.3190 in focus

  • GBP/USD is taking bids near 1.3180 ahead of London open on Thursday.
  • Doubts over Friday’s US NFP rule over Brexit pessimism.
  • 1.3190 seems near-term important resistance with 1.3110 acting as immediate support.

The GBP/USD pair trades around 1.3180 while heading to European sessions on Thursday. Traders gave less importance to the recent Brexit reports as the US Dollar pullback seems to dominate sentiments ahead of Friday’s employment report. Also in attention will be Thursday’s weekly initial jobless claims from the US.

The US Dollar registered first sign of weakness in over a week on Wednesday after the private employment report, ADP employment change, softened. The anticipated early signal for the Friday’s non-farm payrolls (NFP) slipped to 183K versus 189K market consensus in February. The data signaled a weak print of Friday’s NFP, the headline employment figure, which in turn triggered the greenback’s profit-booking.

If we talk about the latest reports concerning Brexit, EU-UK leaders’ meet in Brussels failed to deliver any deal and the EU seems pessimistic of any future deal considering high expectation from the British politicians. It should also be noted that Theresa May’s second Brexit proposal is more likely to be rejected on March 12.

While recent signs over Britain’s departure from the EU aren’t favorable to a smooth outcome, investors are likely giving more importance to the March 13 and 14 voting over no-deal Brexit and delay of Article 50 past-March 29.

Today's initial jobless claims for the week ending on Feb 25 may remain unchanged at 2,25,000. Friday’s February US employment report indicates mixed results. The NFP is expected to weaken to 1,80,000 from 3,04,000 whereas the average hourly earnings are likely to have grown 3.3% over 3.2% on a yearly basis. Further, the Unemployment rate may witness pullback to 3.9% from 4.0%.

GBP/USD Technical Analysis

GBP/USD may find it hard to clear 1.3190 support-turned-resistance line, which joins highs marked in September 2018 to January 2019. The quote can rise to 1.3255 and 1.3290 if it manages to clear 1.3190 hurdle.

Given the pair’s failure to surpass 1.3190, chances of its slide to 1.3110 and 1.3050 can’t be denied whereas 1.3000 and 1.2980 might challenge bears afterward.

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