GBP is experiencing a surge before NFP and GDP. Markets are still incredibly vulnerable to high-impact data. The GBPUSD’s longer-term fundamental future looks bearish. Especially Out of the US.
GBP Vs. US dollar fundamental landscape
Following the European open, GBPUSD experienced a 40-plus pip bounce. Before, partially retracing the move to trade at 1.1875.
Yesterday’s consolidation came after Tuesday’s selloff because markets are still prone to high-impact data activities and central bank discourse.
Thoughts from Fed Chair Powell about how the Fed’s decisions are guided by data. Which appears to have kept market players slightly upbeat. The markets do appear to lack conviction.
GBP investors await NFP and UK GDP report
Searching at yesterday’s ADP figures, it appears that another positive NFP print may be on the horizon. This would support a 50bps increase at the forthcoming Federal Reserve meeting, which starts on March 21.
This morning’s small decrease in the dollar index is likely to give the GBPUSD a near-term boost ahead of tomorrow’s NFP fact sheet, and the UK GDP statistics.
Strongest and Weakest Currencies on a Chart: JPY and USD.
Source: FinancialJuice
However, the longer-term prospects for GBPUSD do favor further declines. Especially in light of the divergent future course that the two Central Banks are likely to take.
Given Fed Chair Powell’s comments this week, there is the presumption that the Bank of England (BoE) may soon pause its rate hike cycle. While the Fed appears poised to keep raising rates.
As we approach the Fed’s blackout period, Michael Barr, a policymaker at the Fed, will make comments later today. As well as the first round of unemployment claims from the US.
Before all attention shifts to the NFP report and average hourly earnings. These are probable to be pivotal as well given the impact they proceed to have on persistent inflation in the US. We have GDP data from the UK tomorrow.
Economic Activity Schedule
TECHNICAL PERSPECTIVE
We are currently retesting the wedge sequence and the 200-day moving average on the daily timeframe. After both of them were broken during Tuesday’s selloff.
A rise above this mark could lead to a retest of the psychological 1.2000 level, which coincides with the 100-day moving average. The 1.1900 value is a near-term resistance region and might limit gains.
A daily candle finish under the 1.1800-handle opens up a retest of the 1.1750 and 1.1650 support areas, in both. While a rejection of 1.1900 and a push lower put resistance turned support at 1.1850 and 1.1800 into play.
GBPUSD daily graph
Source: TradingView
