GBP/USD turns lower, flits with daily low amid the post-NFP modest USD strength


  • GBP/USD drops back closer to the daily low amid the emergence of fresh USD buying.
  • The upbeat US NFP data reaffirms Fed rate hike bets and acts as a tailwind for the buck.
  • Concerns about the UK’s fiscal policy weigh on the GBP and contribute to the downtick.

The GBP/USD pair meets with a fresh supply during the early North American session and slides back closer to the daily low, below mid-1.1100s in reaction to the upbeat US employment details.

The US dollar reverses an intraday dip and climbs to a fresh weekly high after the headline NFP report showed that the US economy added 263K new jobs in September. The reading marks a notable slowdown from the 315K reported in the previous month, though surpasses consensus estimates for a reading of 250K.

Additional details revealed that the unemployment rate fell to 3.5% during the reported month from 3.7% in August, reaffirming hawkish Fed expectations. This, in turn, remains supportive of elevated US Treasury bond yields and underpins the greenback, which exerts some pressure on the GBP/USD pair.

Apart from rising bets for a more aggressive policy tightening by the Fed, the prevalent risk-off mood is seen as another factor benefitting the safe-haven buck. The British pound, on the other hand, is weighed down by concerns about the UK government's fiscal policy and looming recession risks.

The aforementioned fundamental factors suggest that the path of least resistance for the GBP/USD pair is to the downside. Hence, any attempted recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Technical levels to watch

GBP/USD

Overview
Today last price 1.1211
Today Daily Change 0.0048
Today Daily Change % 0.43
Today daily open 1.1163
 
Trends
Daily SMA20 1.1264
Daily SMA50 1.164
Daily SMA100 1.1934
Daily SMA200 1.2551
 
Levels
Previous Daily High 1.1384
Previous Daily Low 1.1113
Previous Weekly High 1.1235
Previous Weekly Low 1.0339
Previous Monthly High 1.1738
Previous Monthly Low 1.0339
Daily Fibonacci 38.2% 1.1216
Daily Fibonacci 61.8% 1.128
Daily Pivot Point S1 1.1056
Daily Pivot Point S2 1.0949
Daily Pivot Point S3 1.0785
Daily Pivot Point R1 1.1327
Daily Pivot Point R2 1.1491
Daily Pivot Point R3 1.1598

 

 

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