- GBP/USD stays defensive after bouncing off a five-week low.
- Dragonfly Doji bullish candlestick joins downbeat RSI to underpin minor recovery but Cable stays below key technical support-turned-resistance.
- BoE’s dovish hike, mostly upbeat US data and hopes of positive surprise from NFP favor Pound Sterling sellers.
- Further downside needs validation from late June swing low.
GBP/USD treads water around 1.2730 as it defends the previous day’s rebound from the lowest levels in five weeks but lacks upside momentum during early Friday morning in Asia. In doing so, the Cable pair struggles to justify the previous day’s Dragonfly Doji bullish candlestick, as well as the downbeat RSI (14) line, amid a cautious mood ahead of the US Nonfarm Payrolls (NFP).
The reason could be linked to the Bank of England’s (BoE) dovish hike joining the bearish MACD signals and the Pound Sterling’s sustained trading beneath the previously key technical support.
Also raed: GBP/USD recovers slightly after BoE’s rate hike, soft US economic data
Among them, the 50-DMA level of around 1.2735 gains the immediate attention of the GBP/USD buyers ahead of the five-month-old support-turned-resistance line around 1.2750.
Also challenging the short-term Cable upside is a downward-sloping resistance line from July 14, close to 1.2805 at the latest.
Meanwhile, the Pound Sterling’s pullback remains elusive unless it defies the bullish candlestick formation by slipping beneath the latest low of 1.2620. Even so, the late June bottom of around 1.2590 can act as an additional downside filter for the GBP/USD bears.
Overall, GBP/USD is likely to remain depressed despite the bullish candlestick and the pre-NFP consolidation.
GBP/USD: Daily chart
Trend: Further downside expected
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.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.