- GBP/USD bounces off January 2017 lows as greenback drops ahead of the key US employment data.
- No-deal Brexit pessimism keeps weighing on the sentiment.
- UK Construction PMI can offer intermediate moves ahead of the UK jobs report.
Although no-deal Brexit pessimism keeps weighing on GBP/USD, the latest retreat of the US Dollar (USD) helps the Cable to recover from multi-month low while taking rounds to 1.2125 on early Friday.
With the Bank of England (BOE) downsizing growth forecasts and conveying worries for a no-deal Brexit, the Cable nosedived to the lowest since January 2017 on Thursday. Initially adding to the weakness was the USD’s strength on the back of the Fed’s less dovish rate cut while the US President Donald Trump’s fresh tariff announcement triggered the greenback’s retreat afterward.
Not only fears of a global slowdown due to the US-China trade war but the presence of monthly employment data from the US also added to the investors’ cautious mode during the early Asian session.
It should, however, be noted that the no-deal Brexit fears remain in the spotlight as the UK policymakers have increased emphasis on preparing for such an event ahead of the parliamentary recess.
On the economic calendar, the British Construction Purchasing Managers’ Index (PMI) for July can offer intermediate trading opportunities ahead of the previous month jobs data from the US. Forecasts suggest, the UK Markit Construction PMI to recover to 46.0 from 43.1 versus likely decline in the headline US Nonfarm Payrolls (NFP) to 164K from 224K. Though, Average Hourly Earnings (YoY) may improve to 3.2% from 3.1% whereas the Unemployment Rate could remain static at 3.7%.
Technical Analysis
While 1.2100 holds the gate for the pair’s further declines towards 1.2000 and the year 2017 low near 1.1987, recovery beyond the previous-day high of 1.2172 can recall 1.2250 back to the chart.
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