GBP/USD rebounds from 50 DMA support, climbs back above mid-1.2200s ahead of US NFP

GBP/USD stages a solid recovery from the 50 DMA support, a nearly three-week low set on Friday.
Sliding US bond yields fails to assist the USD to capitalize on its bounce and lends some support.
A dovish assessment of the BoE decision on Thursday could cap gains ahead of the US NFP data.

Haresh Menghani FXStreet

The GBP/USD pair finds decent support near the 50-day SMA and stages a goodish intraday recovery from the 1.2185-1.2180 region, or a nearly three-week low touched earlier this Friday. The momentum allows spot prices to recover a part of the previous day's Bank of England (BoE)-inspired losses and climb back above the 1.2250 level during the mid-European session.

It is worth recalling that the UK central bank, in its policy statement, removed the phrase that they would "respond forcefully, as necessary" (to inflation). Furthermore, BoE Governor Andrew Bailey said that inflation will continue to fall this year and more rapidly during the second half of 2023. This, in turn, lifted expectations for a less aggressive policy tightening going forward and undermined the British Pound.

That said, the emergence of fresh US Dollar selling assists the GBP/USD pair to attract some buyers near a technically significant 50-day SMA support. In fact, the USD Index, which tracks the Greenback against a basket of currencies, fails to capitalize on the overnight bounce from a nine-month low amid a modest downtick in the US Treasury bond yields. The USD downside, however, seems cushioned ahead of the key US macro data.

Friday's US economic docket highlights the release of the closely-watched US NFP report. An unexpected drop in the US Weekly Initial Jobless Claims pointed to the underlying strength in the labor market and might have lifted expectations for a positive surprise from the official employment details. This, along with a weaker tone around the equity markets, should limit losses for the safe-haven buck and cap the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price	1.2259
Today Daily Change	0.0021
Today Daily Change %	0.17
Today daily open	1.2238

Trends
Daily SMA20	1.2291
Daily SMA50	1.2191
Daily SMA100	1.1797
Daily SMA200	1.1958

Levels
Previous Daily High	1.2402
Previous Daily Low	1.2229
Previous Weekly High	1.2448
Previous Weekly Low	1.2263
Previous Monthly High	1.2448
Previous Monthly Low	1.1841
Daily Fibonacci 38.2%	1.2295
Daily Fibonacci 61.8%	1.2336
Daily Pivot Point S1	1.2178
Daily Pivot Point S2	1.2117
Daily Pivot Point S3	1.2005
Daily Pivot Point R1	1.2351
Daily Pivot Point R2	1.2463
Daily Pivot Point R3	1.2524

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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