- Bears regain control as the US dollar bounces ahead of US NFP.
- Dovish Carney’s speech, weak UK fundamentals/ politics continue to weigh.
The GBP/USD pair is seen breaking lower from its overnight range trade around 1.2575 region, as the bears fight back control and print fresh two-week lows
The renewed weakness seen in the Cable can be mainly attributed to a fresh round buying interest seen in the US dollar across its main peers, as markets resort to covering their USD shorts ahead of the crucial US labor market report.
Moreover, the greenback also gets a boost, as the US yields rebound amid expectations that upbeat US payrolls data could halt the Fed from cutting the rates later this month. The headline June Non-Farm Payrolls (NFP) data will see an increase of 160k vs. +75k seen in May.
The US jobs data remains the main focal point this Friday while the recent dovish comments from the Bank of England (BOE) Governor Mark Carney coupled with disappointing UK PMI readings continue to dent the sentiment around the pound.
Meanwhile, the latest FT report that the UK Conservatives are readying themselves for an October snap election adds to the uncertainty over the UK political climate, in the wake of the no deal Brexit risks, collaborating to the downside in the spot.
Looking ahead, should the US NFP data disappoint, the US dollar is likely to take fresh knock across the board, prompting a bounce in GBP/USD. Although any upside attempts in the major are likely to get sold-off into dovish BOE expectations and UK political uncertainty in the near-term.
Levels to watch
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