- GBP/USD turns positive for the fifth straight day and climbs to a two-week high.
- Diminishing odds for a Fed rate hike in June weigh on the USD and lend support.
- The upbeat US ADP report limits the USD losses and caps the upside for the pair.
The GBP/USD pair reverses an intraday dip to the 1.2400 round-figure mark and turns positive for the fifth successive day on Thursday. Spot prices, however, retreat a few pips from a two-week high touched during the early North American session and trade around mid-1.2400s following the release of the US ADP report.
The US Dollar (USD) ticks higher after Automatic Data Processing (ADP) reported that private sector employers added 278K jobs in May, higher than 170K expected, and caps the upside for the GBP/USD pair. That said, reduced bets for another 25 bps rate hike by the Federal Reserve (Fed) in June keep the USD below its highest level since mid-March touched the previous day and continues to lend support to the major.
It is worth recalling that a duo of FOMC members on Wednesday showed a willingness to pause interest rate hikes this month. Furthermore, the progress towards averting an unprecedented US debt default undermines the safe-haven buck and acts as a tailwind for the GBP/USD pair. In fact, the US House of Representatives voted in favour of a bill to suspend the debt ceiling late Wednesday and the deal now heads to the Senate for approval.
This, along with expectations that the Bank of England (BoE) could raise rates further, suggests that the path of least resistance for the GBP/USD pair is to the upside. Even from a technical perspective, a move beyond the 50-day Simple Moving Average (SMA) adds credence to the positive outlook. This, in turn, supports prospects for an extension of the recent bounce from the 1.2300 mark, or its lowest level since early April touched last week.
Technical levels to watch
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
Editors’ Picks
AUD/USD falls toward 0.6400 amid mixed markets, light trading
AUD/USD is falling back toward 0.6400 in the Asian session on Monday, The pair failed to find any inspiration from the mostly upbeat Chinese business PMIs. A fresh uptick in the US Treasury bond yields and a mixed mood are weighing on the Aussie amid a China holiday.
USD/JPY hits fresh 11-month highs, approaches key 150.00 level
USD/JPY is extending gains toward 150.00, flirting with fresh 11-month highs in Asian trading on Monday. The pair is supported by the renewed upswing in the US Treasury bond yields and dovish BoJ commentary. However, Japanese FX intervention risks mount.
Gold moves below $1,850 on market caution, Fed Powell speech eyed
Gold extends its losing streak that began on September 25, trading lower around $1,840 per troy ounce during the Asian session on Monday. China’s Manufacturing PMI data was released over the weekend, which showed improvement into positive territory but failed to provide any support for the XAU/USD price.
DOT confirms trend reversal, eyes retest of $5 after reclaiming key hurdle
Polkadot price seems to be ending its downtrend after shedding 92.91% in the last two years from its all-time high of $55.09. In the last three days, DOT has inflated by 3.3%, breaching a declining trendline and confirming the potential start of an uptrend.
Week ahead – Dollar shines ahead of Nonfarm Payrolls
Dollar cruises higher, nonfarm payrolls on Friday will be crucial for this rally. Early indicators point to another solid month for the US labor market. Central bank decisions in Australia and New Zealand will also be in focus.