- Traders take a breath ahead of crucial data points.
- 50-day and 100-day SMA seem defining a near-term trading range.
GBP/USD is taking the rounds near 1.3030 during the early Asian session on Friday. The cable weakened on Thursday as the Bank of England (BOE) seemed cautious about soft Brexit and showed readiness to react. Today’s UK services PMI and the US employment data could set the stage for a volatile day.
The British Pound (GBP) didn’t praise the BOE’s upward revision to near-term growth forecasts as bears sneaked to concentrate more on the Brexit outlook. The UK central bank remained cautious about the country’s departure from the EU and stands ready to act as and when needed. Governor Mark Carney dimmed prospects of an increased pace of rate hikes.
In addition to the BOE’s downbeat rhetoric, the US Dollar (USD) strength was also playing its role in dragging the cable downwards. The greenback managed to hold its past-FOMC gains as quarterly nonfarm productivity grew more than expected, giving rise to hopes for an upbeat employment report scheduled for release today.
The Brexit front continues to signal no uniform signals and the doubts over the position of the UK Prime Minister Theresa May remains on the card.
April month Markit services purchasing manager index (PMI) from the UK will be the key to start. The headline economic gauge may recover from 48.9 to the expansion signaling number of 50.5.
After then, the US employment data may portray a mixed picture with no change in the unemployment rate of 3.8%, increase in average hourly earnings (YoY) to 3.3% from 3.2% and a likely pullback in the nonfarm payrolls (NFP) of 196K to 185K.
Technical Analysis
Failure to surpass 50-day simple moving average (SMA) figure of 1.3105 can drag the quote back to 1.2980 mark comprising 100-day SMA. Though, 1.3000 offers an intermediate halt.
Alternatively, 1.3130 and 1.3200 could entertain buyers past-1.3105.
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