GBP/USD seesaws around 1.3600 as softer USD contrasts Brexit, coronavirus woes


  • GBP/USD defends Friday’s run-up towards crucial resistance, remains sidelined of late.
  • Make UK, PwC survey cites UK manufacturers’ optimism for 2022.
  • Virus woes stay on the table despite easing infections as death toll crosses 150,000.
  • EU ‘not impressed’ as UK’s Truss shows readiness to trigger Article 16.

GBP/USD buyers struggle for clear directions as the cable pair takes rounds to 1.3590 during Monday’s Asian session, following the strongest daily run-up in over a week.

The cable pair’s latest inaction could be linked to the contrasting signals by the key risk catalysts as well as an absence of the major data/events during the generally tepid Asian session.

The US Dollar Index (DXY) portrayed the biggest daily loss in six weeks after the December month jobs report failed to impress Fed hawks. That said, the headline Nonfarm Payrolls (NFP) disappointed markets with 199K figures for December versus 400K forecasts and 249K prior (upwardly revised from 210K). However, the Unemployment Rate dropped to 3.9% compared to 4.1% market consensus and 4.2% in November while the U6 Underemployment Rate that fell to 7.3% against November's downwardly revised 7.7%, both closing in the pre-pandemic levels.

It should be noted, however, that an NFP-led disappointment was largely overruled by the Unemployment Rate and U6 Underemployment Rate, which in turn seems to challenge the market sentiment of late.

While portraying the same, S&P 500 Futures drop 0.20% intraday while the Antipodeans and commodities remain pressured by the press time.

Elsewhere, the latest reduction in the UK’s covid cases and death toll, recently around 147,472 and 97 in that order, fails to renew market optimism as the virus-led death numbers crossed 150,000. Following the news, UK PM Boris Johnson said the covid has "taken a terrible toll on our country" while pushing for vaccination and thanking the National Health Service (NHS).

It’s worth noting that the Brexit front flashed another negative signal as the UK’s newly appointed Brexit Minister Liz Truss wrote to Telegraph on Saturday, “insisted she was ‘willing’ to use the ‘legitimate provision’ should a ‘negotiated solution’ not be reached on the Northern Ireland Protocol,” per the Daily Express. “Joao Vale de Almeida, the EU's ambassador to the UK, said it was unhelpful to ‘keep agitating the issue’, noting the bloc was not surprised by the threat but ‘we are not too impressed,’” adds the news.

On a positive side, the British manufacturers remain optimistic per the latest survey details of the UK think tank and PwC. "Trade body Make UK and accountants PwC said 73% of manufacturers believed conditions for the sector would improve and 78% foresaw at least a moderate increase in productivity in 2022," said Reuters.

Looking forward, a light calendar at home and an absence of Japanese traders could restrict GBP/USD moves in Asia, as well as early Europe. However, the cable pair’s recent recovery may persist should the greenback fails to recovery Friday’s losses.

Technical analysis

A clear upside break of the 100-DMA, surrounding 1.3555 by the press time, keeps GBP/USD buyers hopeful to overcome the 1.3600-10 resistance zone established since October 2021.

Additional important levels

Overview
Today last price 1.3592
Today Daily Change -0.0003
Today Daily Change % -0.02%
Today daily open 1.3595
 
Trends
Daily SMA20 1.34
Daily SMA50 1.3399
Daily SMA100 1.3557
Daily SMA200 1.374
 
Levels
Previous Daily High 1.3597
Previous Daily Low 1.3528
Previous Weekly High 1.3599
Previous Weekly Low 1.3431
Previous Monthly High 1.355
Previous Monthly Low 1.3161
Daily Fibonacci 38.2% 1.3571
Daily Fibonacci 61.8% 1.3554
Daily Pivot Point S1 1.3549
Daily Pivot Point S2 1.3504
Daily Pivot Point S3 1.348
Daily Pivot Point R1 1.3619
Daily Pivot Point R2 1.3643
Daily Pivot Point R3 1.3688

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD holds recovery gains above 1.0650, as risk appetite returns

EUR/USD holds recovery gains above 1.0650, as risk appetite returns

EUR/USD is clinging to recovery gains above 1.0650 in the Asian session on Monday. The pair regains lost footing, as markets remain upbeat and weigh negatively on the safe-haven US Dollar. Markets reposition ahead of key Eurozone and US data due later this week. 

EUR/USD News

GBP/USD rebounds from YTD trough, steadily climbs back closer to 1.2400 mark

GBP/USD rebounds from YTD trough, steadily climbs back closer to 1.2400 mark

GBP/USD attracts some dip-buyers on Monday amid a softer USD, though lacks follow-through. Easing geopolitical tensions boosts investors’ confidence and undermines the safe-haven buck. Reduced Fed rate cut bets should help limit the USD losses and cap any further gains for the pair.

GBP/USD News

Gold price trades with modest losses below $2,400 mark, downside seems limited

Gold price trades with modest losses below $2,400 mark, downside seems limited

Gold price drifts lower on Monday amid hopes that the Iran-Israel conflict will not escalate further. Reduced Fed rate cut bets are keeping the US bond yields elevated and also exert pressure on the metal. The fundamental backdrop warrants caution before positioning for any further depreciating move.

Gold News

Meme coin madness returns after Bitcoin halving concludes

Meme coin madness returns after Bitcoin halving concludes

As Bitcoiners and cryptocurrency enthusiasts continue to celebrate the fourth Bitcoin halving, capital overflows are channeling into meme coins, causing key sector players to rally.

Read more

Dollar Index in view ahead of data

Dollar Index in view ahead of data

Ahead of this week’s US GDP first estimate print and the PCE Price Index numbers, the US Dollar Index will likely be a watched market. Buyers remain firmly at the wheel. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures