GBP/USD loses ground following strong labor market data from the US

The GBP/USD currently trades at 1.2615, recording mild losses.
Broad-spectrum technical indicators reveal a bullish hold for larger time-frames but the short term is somewhat negative.
The USD is getting traction thanks to positive labor market figures and markets pushing the Fed’s easing cycle to May.

Patricio Martín FXStreet

On Thursday, the GBP/USD pair declined towards the 1.2615 level showing slight losses with upbeat US labor market figures benefiting the Greenback with Jobless claims from the week ending on February 3 coming in lower than expected. However, the Bank of England (BoE) holds a somewhat similar stance as the Federal Reserve (Fed) in delaying rate cuts so the losses may be limited.

Moreover, markets are predicting 100 bps rate cuts over the next 12 months, starting in June while investors are seeing higher 125 bps of easing in 2024 from the Fed indicating that the losses from the Pound may be limited. However, it will all come down to the incoming data as they will shape the expectations of the next decisions. Next in line, next Tuesday, the US will release January’s inflation figures while the UK will reveal key labor market figures which may likely set the pace for the pair for the next sessions.

GBP/USD daily chart

The indicators on the daily chart reflect a somewhat bearish bias for the short term. The Relative Strength Index (RSI) is on a downward slope and in negative territory. This gives clear evidence that market sentiment is favoring the sellers. Concurrently, the Moving Average Convergence Divergence (MACD) is throwing out red bars, indicating the selling pressure is not diminishing. That being said, on the broader market outlook, the pair is below the 20-day Simple Moving Averages (SMAs), but above the 200 and 100-day SMA. This suggests that the overall uptrend prevails, despite the recent downward movements, but as long as the buyers fail to reconquer the 20-day average, more downside may be on the horizon.

GBP/USD daily chart

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

GBP/USD remains offered near 1.3470

GBP/USD adds to the multi-day negative streak and retreats toward the 1.3470 zone on Wednesday, or four-week troughs. Cable’s deep correction comes on the back of the unabated recovery in the Greenback and the persistent geopolitical concerns.

EUR/USD bounces off lows; still below 1.1600 post-ADP

EUR/USD now manages to pick up some pace and revisits the 1.1580 region on Wednesday. That said, the pair rebounds from earlier two-week lows following some loss of momentum in the US Dollar soon after the ADP report came in short of expectations in August.

Gold treads water above $4,300

Following an earlier pullback to the $4,280 region per troy ounce, Gold prices now regain some composure and reclaim the $4,300 mark, advancing modestly for the day and setting aside three consecutive days of losses. The precious metal’s lacklustre rebound comes amid modest gains in the US Dollar, steady geopolitical uncertainty and mixed US Treasury yields.

WTI advances to mid-$90.00s, fresh high since July 24 amid escalating US-Iran tensions

West Texas Intermediate (WTI) – the benchmark US Crude Oil price – scales higher for the third straight day – also marking the fifth day of a positive move in the previous six – and climbs to a fresh high since July 24 during the Asian session on Wednesday.

BoC set to keep interest rates steady despite sticky inflation

The Bank of Canada is widely expected to keep its policy rate unchanged at 2.25% on Wednesday. This would be the seventh consecutive gathering with the central bank sitting on the fence. The BoC left its policy rate unchanged at 2.25% in July, as widely anticipated.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.