“¢ USD bulls seemed uninspired by stronger than expected US private sector employment details.
“¢ Traders also seemed inclined to lighten their bearish bets amid absent negative Brexit headlines.
The GBP/USD pair held on to its strong recovery gains, around the 1.2775 region, and had a rather muted reaction to the latest US ADP report.
After an initial dip to sub-1.2700 level, 2-1/2 month lows, and spending majority of the Asian session in a narrow trading range, the pair staged a solid rebound and was being supported by a modest US Dollar retracement from 16-month tops.
The greenback bulls held on the back-foot and failed to gain any respite from the latest ADP report, which showed that private sector employers added 227K new jobs in October. The reading was slightly lower than 230K in the previous month but was much higher than 189K anticipated, though did little to provide any meaningful impetus to the buck.
Meanwhile, today’s strong up-move could further be attributed to and supported by some short-covering in absence of any fresh negative Brexit headlines. Traders now seemed inclined to lighten their bearish bets, ahead of the BoE’s Super Thursday.
It, however, remains to be seen if the recovery is backed by any genuine buying or is once again utilized as an opportunity to initiate fresh short positions amid persistent Brexit uncertainties, which has been one of the key factors behind the pair’s recent slump from the 1.3255-60 region touched on Oct. 12.
Technical outlook
Mario Blascak, FXStreet’s own European Chief Analyst writes: “the technical oscillators including Momentum, the Relative Strength Index both turned higher on a 1-hour chart. The Slow Stochastics is about to make a bearish swing lower in the overbought territory. After the GBP/USD fell past price target of 1.2920 and fell to mid 1.2700s, the next target is 1.2662 representing 2018 low.”
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