“¢ Absent negative UK political or Brexit headlines prompt some short-covering.
“¢ The USD consolidates recent losses and does little to influence the price action.
“¢ The market focus remains on Friday’s important release of the US jobs report.
The GBP/USD pair picked up the pace since the early European session on Friday and spiked to fresh session tops, around the 1.2720-25 region in the last hour.
The pair regained some positive traction on the last trading day of the week, albeit the uptick lacked any obvious fundamental catalyst and could be solely attributed to some short-covering move amid absent negative UK political or Brexit headlines.
Meanwhile, the US Dollar held steady but struggled to attract any meaningful buying interest amid firming market expectations that the Fed will be forced to cut interest rates by the end of this year and hence, did little to hinder the intraday positive move.
It, however, remains to be seen if the pair is able to capitalize on the positive move or continues with its struggle to make it through the 1.2745-50 supply zone amid persistent UK political uncertainty and growing fears of a no-deal Brexit.
Given that former foreign secretary and a hard-Brexiteer Boris Johnson remains the leading candidate to be the next British PM, fading hopes for a softer Brexit should hold investors from placing any bullish bets and eventually keep a lid on any meaningful up-move.
Moving ahead, Friday’s key focus will be on the release of the closely watched US monthly jobs report – popularly known as NFP, which should play a key role in influencing the near-term USD price dynamics and produce some meaningful trading opportunities.
Technical levels to watch
As Yohay Elam, FXStreet’s own Analyst writes: “If the pair manages to run higher, it may face another convergence of resistance lines at 1.2741 where the one-week Pivot Point Resistance 1 and the PP 1d-R1 meet.”
“Looking down, some support awaits at 1.2668 which is the confluence of the PP 1d-S1, the SMA 10-1d, and the previous daily low. The downside target is far below – at 1.2563 where the previous monthly low converges with the previous weekly low,” he added further.
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