GBP/USD erases daily gains, slide farther below mid-1.2600s

   “¢   US economy added 312K new jobs in December; wage growth betters expectations.
   “¢   The USD regains positive traction and remains supported by rallying US bond yields.
   “¢   Market participants now look forward to Powell’s comments for some fresh impetus.

The GBP/USD pair erased early gains to the 1.2700 neighborhood and is currently placed at the lower end of its daily trading range.  

With investors looking past today’s better than expected UK services PMI, a modest pickup in the US Dollar demand turned out to be one of the key factors that prompted some selling at higher levels.  

The greenback regained some positive traction following the release of blockbuster US monthly jobs report, showing that the economy added 312K new jobs in December as against 177K anticipated.  

Meanwhile, previous month’s reading was revised higher to 176K, from 155K reported earlier, and average hourly earnings growth also bettered market expectations, largely offsetting an unexpected rise in the unemployment rate.

The reaction to an extremely strong jobs report, however, turned out to be rather tepid as market participants now await comments from the Fed Chair Jerome Powell amid increasing concerns about the economy.

Hence, it would be prudent to wait for a follow-through price-action before positioning for the pair’s trajectory on the last trading day of the week and ahead of the upcoming UK parliament debate on the PM May’s Brexit deal.

Technical levels to watch