“¢ The USD fails to preserve modest recovery gains on dismal ADP report.
“¢ The US private sector employers added only 27K new jobs in May.
“¢ Traders now eye US ISM PMI for some respite for the USD bulls.
The GBP/USD pair quickly reversed a dip to sub-1.2700 level and jumped to fresh session tops in reaction to the dismal ADP report from the US.
The US Dollar failed to preserve its intraday modest recovery gains after the latest ADP report showed that the US economy added only 27K new jobs in May, marking its worst reading since March 2010.
The report – considered as a precursor for Friday’s official jobs report (NFP), now seems to have reinforced market expectations that the Fed will cut interest rates by the end of this year and exerted some pressure on the greenback.
Meanwhile, the British Pound remains supported by Wednesday’s better than expected UK services PMI print for the month of May and the latest optimism over the post-Brexit trade relations with the US.
It would now be interesting to see if the pair is able to capitalize on the positive move or meets with some fresh supply at higher levels amid persistent UK political and Brexit uncertainties.
Wednesday’s US economic docket also highlights the release of ISM non-manufacturing PMI, which will now be looked upon for some immediate respite for the USD bulls and grab some short-term trading opportunities.
Technical levels to watch
As Yohay Elam, FXStreet’s own Analyst writes: “Resistance awaits at the late-May high of 1.2750. The next cap is 1.2815 which was a swing high in late May as well. Further above, 1.2870 was the low point in April and 1.2900 provided support in early May.”
“Today’s low of 1.2690 is the immediate line of support. It is followed by 1.2640 which was a swing low earlier in the week, then by 1.2605 that was a trough in late May, and finally, by 1.2560, the lowest point in four months, recorded in late May,” he added further.
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