GBP/USD remains on the defensive, below mid-1.3100s post-ADP report

Haresh Menghani FXStreet

• Fresh Brexit jitters continue to weigh on the British Pound.
• Mixed ADP report fails to provide any meaningful impetus.

The GBP/USD pair maintained its offered tone through the early North-American session and moved little post-US labor market report.

According to the latest ADP report, private sector employers added 183K new jobs in February as compared to consensus estimates pointing to a reading of 189K. A slight disappointment was largely offset by a sharp upward revision to the previous month's figures, now showing an addition of 300K jobs (213K reported previously) and making it the best month since May 2015.

The US Dollar bulls seemed rather unimpressed by the report, though the prevalent cautious mood, reinforced by a modest decline in the US Treasury bond yields, coupled with reemerging Brexit uncertainties kept the pair on the defensive below mid-1.3100s.

In the latest Brexit development, meeting between UK Attorney General Geoffrey Fox, Brexit Minister Stephen Barclay and EU's chief negotiator Michel Barnier on Tuesday failed to produce any major breakthrough on the Irish backstop issue and the talks were said to continue on Wednesday.

With today's US economic data out of the way, any incoming Brexit-related headlines might continue to act as an exclusive driver of the sentiment surrounding the British Pound and produce some meaningful trading opportunities ahead of scheduled speeches by New York Fed President John Williams and external BoE MPC Member Michael Saunders.

Technical outlook

Yohay Elam, FXStreet's own Analyst offers important technical levels to trade the pair: “Support is at the round number of 1.3100 which supported the pair on Tuesday. The next level to watch is 1.3050 which provided some support in late February and meets the rising 200 SMA. 1.3010 cushioned cable in mid-February and is followed by the swing low fo 1.2970 seen later last month.”

“1.3150 supported the pair on Tuesday and is fought over at the time of writing. 1.3200 was the high point on Tuesday and also a round number. 1.3270 was the peak on Monday, before GBP/USD closed the gap. 1.3350 is the high point recorded late in February,” he added further.

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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