GBP/USD falls toward mid-1.29s as US Dollar Index breaks above 96.50

• Strong employment data from the U.S. boost  the buck on Friday.
• 10-year U.S. T-bond yield  rises above 3.2% to support the USD’s upsurge.
• The pair remains on track to close the week more than 100 pips higher.

After adding more than 200 pips on Thursday, the GBP/USD pair stage a technical correction during the first half of the day on Friday and came under an additional bearish pressure during the NA session. As of writing, the pair was trading at session lows near 1.2960, losing 0.4% on a daily basis.

Following a drop to the 96 handle for the first time in 9 days, the US Dollar Index reversed its course during the American trading hours and erased its losses after the October employment report published by the U.S. Bureau of Labor Statistics showed that the labour market hasn’t lost any momentum at all.  

Nonfarm payrolls in the U.S. increased by 250K despite the hurricanes and the unemployment rate stayed unchanged at 3.7% while the annual wage inflation increased to 3.1% from 2.8%. Commenting on the data, “After being battered by hurricane Florence the prior month, the U.S. labour market bounced back in October. Not only were job gains larger than expected (+250K for non-farm payrolls), but they were also broad based as evidenced by the highest private sector diffusion since last May,” NBF analysts said.

Additionally, in reaction to the solid data, the 10-year T-bond yield  in the U.S. rose above 3.2% for the first time in 10-days to provide an additional lift to the greenback. At the moment, the US Dollar Index is up 0.25% on the day at 96.55.

Technical levels to consider

The pair could face the first technical resistance at 1.3040 (50-DMA/daily high/Nov. 1 high) ahead of 1.3090 (Oct. 22 high) and 1.3180 (Oct. 15 high). On the downside, supports are located at 1.2940 (Oct. 23 low), 1.2870 (Oct. 24 low) and 1.2800 (psychological level/Oct. 25 low).