- GBP/USD witnessed a dramatic intraday turnaround on Friday and reversed the overnight losses.
- The intraday buying picked up pace in reaction to a rather unimpressive US monthly jobs report.
- Sustained strength beyond the 1.4200 mark will now be seen as a fresh trigger for bullish traders.
The GBP/USD pair caught some aggressive bids during the early North American session and shot to fresh daily tops, around the 1.4180 region in reaction to mixed US jobs data.
The latest leg of a sudden spike over the past hour or so was sponsored by the emergence of some fresh selling around the US dollar following a slight disappointment from the headline NFP print. The US Bureau of Labor Statistics reported that the US economy added 559K new jobs in May as against market expectations for 650K.
This, to a larger extent, offset an upward revision of the previous month’s reading to 278K from 266K and a slightly larger than anticipated fall in the unemployment rate. The softer data eased market concerns that the Fed could begin tapering sooner rather than later, which was evident from a knee-jerk fall in the greenback.
On the other hand, the British pound remained well supported by the upbeat outlook for the UK economic recovery. The optimism was further fueled by this week’s mostly upbeat UK PMI prints for May. This, along with indications that the Bank of England could raise rates well into next year, acted as a tailwind for the British pound.
With the latest leg up, the GBP/USD pair has now reversed the previous day’s negative move and a subsequent strength beyond the 1.4200 mark will set the stage for additional gains. Bulls might then aim to surpass YTD tops, around the 1.4245-50 region before eventually pushing the pair towards the 1.4300 round figure.
Technical levels to watch
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