GBP/USD keeps red after strong ADP report

Haresh Menghani FXStreet

The GBP/USD pair failed to extend the recovery momentum, albeit had a muted reaction to the release of strong ADP report on US private sector employment.

Currently trading around 1.2460-55 region, the pair remained in negative territory, still around 40-pips off session low near 1.2420 touched during European session, after ADP report showed US private sector added 216K jobs during the month of November, surpassing even the most optimistic estimates and was much stronger-than October’s 147K.

Today’s ADP report reaffirmed the underlying strength in the US labor market and might have now raised barrier for Friday’s official data, popularly known as NFP.

Next on tap from the US economic docket would be the Fed's preferred inflation gauge - Core PCE Price Index, Chicago PMI and pending home sales data. Later during NY trading session, speech from Federal Reserve Governor Jerome Powell might also provide some impetus.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, “Technically, the GBP/USD 4 hours chart presents a modest upward tone, given that the price has settled above its moving averages, while the RSI indicator aims higher around 56. Still the Momentum indicator maintains a neutral stance, heading lower around its 100 level. Selling interest around 1.2500/30 remains strong, and would take a break above this last to see the pair gaining some ground towards the 1.2600 region.”

“Below the daily low on the other hand, the risk turns towards the downside, with 1.2400 and 1.2365 as the next probable bearish targets.”

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2433

36% Bullish
36% Bearish
29% Sideways

Bias Neutral

1 Month

Avg Forecast 1.2409

24% Bullish
59% Bearish
18% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.2293

5% Bullish
47% Bearish
47% Sideways

Bias Bearish

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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