GBP/USD bulls struggle near 1.3300 handle despite softer US macro data

   “¢   ADP report falls short of consensus estimates and shows additional of 178K jobs.
   “¢   US Q1 GDP growth rate revised lower to show annualize growth rate of 2.2%.

The GBP/USD pair quickly reversed a mid-European session dip to 1.3255 area and moved back above the 1.3300 handle, albeit struggled to gain any follow-through traction.  

The pair’s relief rally got an additional boost following the release of weaker than expected ADP report, which showed that private sector employment increased by 178K in May as compared to 190K expected. Adding to the disappointing headline figures, previous month’s reading was revised down to show 163K new jobs, as against 204K reported earlier.  

This coupled with a downward revision of the Q1 US GDP growth, which now stands at an annualized pace of 2.2% vs. 2.3% estimated earlier, did little to revive the US Dollar demand and remained supportive of the strong bid tone surrounding the major.

Further gains, however, remained capped amid uncertain environment, especially surrounding the impending Brexit talks and the political turmoil in Italy – the Euro-zone’s third-largest economy, all this against the backdrop of recent dovish shift by the BoE.  

Technical outlook

Mario Blascak, FXStreet’s own European Chief Analyst writes: “Technically, the GBP/USD is capped below downward sloping trendline with the 50-period moving average acting as the immediate resistance. On the top side the GBP/USD is facing trendline resistance at 1.3300 before 1.3380 representing 61.8% Fibonacci retracement of GBP/USD rising from 1.2770 to 1.4377 22 month high from April 17 this year. On the downside 1.3200 act as a psychological barrier with 1.3000 ten big figures support next and 1.2770 representing the ultimate, 100% retracement of the above mentioned trend higher.”