GBP/USD retreats from 1.1850 as risk-off mood rebounds amid tight US labor market

GBP/USD has sensed selling interest after a less confident recovery to near 1.1850 amid the risk-off mood.
Fed’s Powell has reiterated the need for bigger rates to bring down persistent US inflation.
BoE Dhingra cited that overtightening poses a more material risk at this point.

Sagar Dua FXStreet

The GBP/USD pair is observing selling pressure around 1.1850 in the early Tokyo session after remaining sideways on Wednesday. The Cable might deliver sheer losses after surrendering the immediate support of 1.1800. The downside bias for the Cable looks favored as Federal Reserve (Fed) chair Jerome Powell has reiterated the need for bigger rates to bring down persistent United States inflation.

S&P500 futures are showing modest gains, however, the recovery move looks less confident, which could be capitalized as a selling opportunity by the market participants. The US Dollar Index (DXY) settled above 105.20 after a volatile day inspired by upbeat United States Employment data reported by Automatic Data Processing (ADP) agency.

The release of the fresh payrolls addition at 242K vs. the consensus of 200K and the prior release of 119K has confirmed that the US labor market is extremely tight and investors should be prepared to face the extreme stubbornness of inflation. It is highly expected that firms will offer higher wages to fetch talent onboard amid a shortage of labor. This will deliver more funds to households for disposal, which will increase resilience in overall consumer spending.

Also, upbeat Job Openings data added fuel to the fire. The economic data landed at 10.824 million vs. the consensus of 10.6K. Higher job openings demonstrate the overall demand, which is going to propel the Consumer Price Index (CPI).

Later this week, the official labor market data will be keenly watched by the street. As per the estimates, the US Nonfarm Payrolls (NFP) (Feb) is expected to land at 203K lower than the former bumper release of 517K.

On the United Kingdom front, falling odds of more restrictive monetary policy is expected to keep the Pound Sterling on the tenterhooks. Bank of England (BoE) policy maker Swati Dhingra warned against further interest rate increases by citing “Overtightening poses a more material risk at this point.” She further added, “Many tightening effects are yet to fully take hold.”

GBP/USD

Overview
Today last price	1.1844
Today Daily Change	0.0016
Today Daily Change %	0.14
Today daily open	1.1828

Trends
Daily SMA20	1.2036
Daily SMA50	1.2136
Daily SMA100	1.1997
Daily SMA200	1.1909

Levels
Previous Daily High	1.2065
Previous Daily Low	1.1822
Previous Weekly High	1.2143
Previous Weekly Low	1.1922
Previous Monthly High	1.2402
Previous Monthly Low	1.1915
Daily Fibonacci 38.2%	1.1915
Daily Fibonacci 61.8%	1.1972
Daily Pivot Point S1	1.1745
Daily Pivot Point S2	1.1661
Daily Pivot Point S3	1.1501
Daily Pivot Point R1	1.1988
Daily Pivot Point R2	1.2148
Daily Pivot Point R3	1.2231

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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