- A goodish pickup in the USD demand prompted some selling around GBP/USD on Friday.
- The USD held on to its gains following the release of mostly upbeat US monthly jobs data.
- Growth concerns, fiscal impasse capped the USD upside and helped limit losses for the pair.
The GBP/USD pair dropped to fresh daily lows, around the 1.3065 region in reaction to upbeat NFP report, albeit quickly recovered few pips thereafter.
The pair extended its steady retracement slide from the previous session’s five-month tops and lost some additional ground during the early North American session on Thursday. The US dollar maintained its strong bid tone following the release of the US monthly jobs data and was seen as a key factor exerting pressure on the GBP/USD pair.
According to the data published by the US Bureau of Labor Statistics, Nonfarm Payrolls (NFP) in the US rose by 1.763 million in July as compared to the market expectation of 1.6 million. Further details revealed that the Unemployment Rate fell to 10.2% as against consensus estimates pointing to a drop to 10.5% from 11.1% reported in June.
As investors looked past Friday’s key macro data, the USD struggled to capitalize on the momentum, instead started losing steam amid concerns about the pace of the US economic recovery and the political deadlock over the next round of the US fiscal stimulus. This, in turn, helped the GBP/USD pair to quickly bounce back to the 1.3100 mark.
Hence, the focus shifts back to negotiations on the coronavirus relief bill, which will play a key role in influencing the USD price dynamics. This coupled with developments surrounding the US-China saga will produce some meaningful trading opportunities on the last day of the week.
Technical levels to watch
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