GBP/USD tumbles to the 1.2100 zone as Dollar jumps on upbeat NFP


  • US jobs numbers surpass expectations in January, not earnings.
  • US Dollar and Treasury bond yields soar after NFP.
  • GBP/USD extends weekly losses as USD jumps on data.

The GBP/USD tumbled from 1.2250 to 1.2100, reaching the lowest level in three weeks after the NFP. During the last hour, it rebounded modestly rising toward 1.2150.

The data published by the US Bureau of Labor Statistics (BLS) revealed on Friday that Nonfarm Payrolls rose by 517K in January, much higher than the market expectation of 185K. November and December's figures were revised higher. The unemployment rate dropped to 3.4%.

The US Dollar rose sharply across the board after the report while US yields soared. At the same time, the Pound printed fresh monthly lows versus the Euro.

A bad end for a bad week

On a weekly basis, the GBP/USD is having the biggest decline since September at times of the UK government crisis. The result is the combination of a major recovery of the US Dollar during the last two days of the week but also on the back of a weaker Pound following central bank meetings.

On Thursday, as expected, the Bank of England raised the key interest rate by 50 basis points. Analysts at TD Securities point out the Monetary Policy Committee toned down its guidance on the pace of future hikes. "The vote was less dovish than expected (7-2) but language was softened to suggest a meeting-by-meeting approach to hikes from here".

Next week is light in terms of major data releases. Attention will be back of Federal Reserve officials after the latest FOMC meeting and today's employment data. Fed chair Powell is among the official that will speak.

In the UK, Q4 and December GDP data is due next Friday. "Further strikes, a fall in hospital visits, and heavy snowfall likely drove a sharp decline in Dec GDP. However, even this bad a monthly reading won't quite tip the UK into recession—for now at least", said TDS analysts.

Technical levels

GBP/USD

Overview
Today last price 1.2137
Today Daily Change -0.0101
Today Daily Change % -0.83
Today daily open 1.2238
 
Trends
Daily SMA20 1.2291
Daily SMA50 1.2191
Daily SMA100 1.1797
Daily SMA200 1.1958
 
Levels
Previous Daily High 1.2402
Previous Daily Low 1.2229
Previous Weekly High 1.2448
Previous Weekly Low 1.2263
Previous Monthly High 1.2448
Previous Monthly Low 1.1841
Daily Fibonacci 38.2% 1.2295
Daily Fibonacci 61.8% 1.2336
Daily Pivot Point S1 1.2178
Daily Pivot Point S2 1.2117
Daily Pivot Point S3 1.2005
Daily Pivot Point R1 1.2351
Daily Pivot Point R2 1.2463
Daily Pivot Point R3 1.2524

 

 

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