- GBP/USD pays little heed to the Brexit uncertainty amid overall weakness of the USD.
- Markets turn pessimistic of the US jobs report considering the latest forward-looking indicators.
- UK PM’s Brexit plan gain support at home but the EU demand full/better detail in one week.
With the worries concerning the US fundamentals weighing over the Brexit headlines, the GBP/USD pair takes the bids to 1.2350 while heading into the London open on Friday.
US ISM Non-Manufacturing Purchasing Managers’ Index (PMI) joining the previous manufacturing gauge from the same surveyor, coupled with pessimistic signals from the survey components, the US Dollar (USD) stretches its pullback from the two-year top.
With this, cable trades shrugged off early-day headlines suggesting the European Union (EU) has given one week’s time to the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson to present better deal. The Guardian also mentions the bloc’s requirement of full details. On the other hand, the same might have highlighted The Sun’s news that the Tory leader is likely to gain support of 30 Labour rebels that can help his Brexit deal pass through the UK’s House of Commons.
Looking forward, investors will be more concerned with the September month employment data, namely Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings while also keeping an eye on the US Federal Reserve Chairman Jerome Powell’s speech at the “Fed Listens” event.
While the headline NFP is likely to rise to 145K from 130K prior, TD Securities say, “Our expectation for payrolls should do little to assuage fears of a broader economic slowdown. Two weak ISM reports help to cement that US data momentum is on the ebb. This leaves the USD tactically vulnerable to sliding further as it runs rich against most of the G10.”
Technical Analysis
The 130-pip area between 50-day and 21-day simple moving averages (SMA), 1.2250 and 1.2380 respectively, could keep the pair’s moves confined with overall downtrend prevailing unless buyers clear seven-month long falling trend-line, at 1.2540 now.
Share
