GBP/USD struggles to grasp 1.2700 in frothy Thursday trading
- GBP/USD leaning flat on Thursday as pair grapples with 1.2700
- UK data broadly beat market forecasts, but US data dominated the flow.
- US ADP employment surged higher in December, thumping expectations.
The GBP/USD is whipsawing on Thursday, ticking into an intraday high of 1.2730 before getting forced lower by US Dollar (USD) flows dragging the Pound Sterling (GBP) back below the 1.2700 handle. The pair is set to end Thursday near flat as markets gear up for another print of US Nonfarm Payrolls (NFP) due on Friday.
UK economic data broadly beat the street early Thursday, printing in the green across the board, headlined by a jump in Mortgage Approvals and a higher clip than expected in UK S&P Global/CIPS Services Purchasing Managers’ Index (PMI) in December, but with all data strictly low-impact, the Cable struggled to develop meaningful momentum on the clean beat across the data docket.
Low-impact UK data gets overshadowed by US labor data, looming US NFP
US ADP Employment Change in December surged higher, adding 164K new jobs for the month and handily beating the forecast 115K and November’s 101K print (revised slightly lower from 103K). Market participants are scrambling to readjust their US NFP forecasts for Friday’s official employment report, but widening deviations between Bureau of Labor Statistics (BLS) figures and privately gathered ‘preview prints’ render direct correlation calculations a quagmire.
US Initial Jobless Claims also improved for the week ended December 29, showing 202K new unemployment benefits claims versus the forecast 216K, a significant recovery from the previous week’s 220K initial benefits claims (revised slightly higher from 218K).
Friday’s US NFP is currently forecast to step down from November’s 199K to 170K in December, and December’s annualized Average Hourly Earnings growth is expected to tick down slightly from 4.0% to 3.9% MoM.
GBP/USD Technical Outlook
The GBP/USD is snarled in intraday congestion as the 1.2700 handle hardens into a hard barrier, with bids capped by the 200-hour Simple Moving Average (SMA) near 1.2710 while the 50-hour SMA rises into 1.2660 to constrain near-term chart action.
Momentum behind the Pound Sterling is beginning to evaporate, and the GBP/USD is threatening to get trapped in congestion on daily candlesticks as the 50-day SMA prepares to confirm a bullish cross of the 200-day SMA just south of 1.2550, and the immediate technical ceiling sits at last week’s peak bids near 1.2825.
GBP/USD Hourly Chart
GBP/USD Daily Chart
GBP/USD Technical Levels
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
