GBP/USD Price Analysis: Poised to challenge the 1.2000 mark

GBP/USD fell to 1.2051, a seven-month low Tuesday as speculative interest rushed into the safe-haven US Dollar. The American currency rallied on renewed speculation the United States (US) Federal Reserve (Fed) will maintain its aggressive posture on monetary policy, as inflation remains “too high,” according to different officials, while the labor market remains tight.

On Tuesday, the Bureau of Labor Statistics (BLS) reported that the number of job openings on the last business day of August stood at 9.6 million, much higher than the 8.8 million anticipated. The headline spurred risk aversion, and Wall Street nose-dived as government bond yields soared, reflecting investors’ concerns. Additionally, the US reported that IBD/TIPP Economic Optimism plunged to 36.6 in October from 43.2 in the previous month.

Market players will keep an eye on the September S&P Global Services and Composite PMIs, which will be out on Wednesday. The UK Services PMI is expected to be confirmed at 46.8, while the Composite index is foreseen at 47.2. Across the pond, the US will publish the September ADP Employment Change, predicted at 1.53K, and the official ISM Services PMI, anticipated at 53.6 in September.

GBP/USD technical outlook

The GBP/USD pair trades around 1.2080 mid-American afternoon, meeting sellers at around the 1.2100 threshold. The 1.2000 threshold is the next potential bearish target and is a strong psychological barrier. Significant stop loss should accumulate below the figure, and if those get triggered, the slide could accelerate towards the 1.1900 figure.