GBP/USD sticks to modest gains, above 1.30 handle post-NFP

   “¢   The USD fails to reverses PBoC headlines-led modest retracement slide.
   “¢   July monthly jobs report shows US economy added 157K new jobs.
   “¢   Unemployment rate ticks down to 3.9% and wage growth match expectations.

The GBP/USD pair held on to its modest daily gains, above the key 1.30 psychological mark, albeit struggled to gain any follow-through traction post- US monthly jobs report.

With investors looking past today’s disappointing UK services PMI, the pair enjoyed a brief rally and spiked to a session high level of 1.3043 on the back of a modest US Dollar retracement, triggered by the headlines that PBoC raises reserve requirement on FX forwards trading to 20%.

The uptick remained supported after the headline NFP print fell short of consensus estimates and showed that the US economy added 157K new jobs during the month of July, lower than 190K expected and worse than previous month’s upwardly revised reading of 248K.

Additional details showed that the unemployment rate ticked lower to 3.9%, on expected lines. Meanwhile, average hourly earnings growth, coming in at 0.3% m/m and 2.7% y/y, partly offset the negative headline print and helped limit any deeper losses for the greenback, eventually capped gains for the major.

Today’s US economic docket also features the release of ISM non-manufacturing PMI and would now be looked upon to grab some additional short-term trading opportunities on the last trading day of the week.  

Technical levels to watch

Immediate resistance is pegged near the 1.3065-70 region, above which the pair is likely to aim towards reclaiming the 1.3100 handle. On the flip side, weakness below 1.2975 level (session low) might now drag the pair below YTD low, around the 1.2960-55 region, towards testing the 1.2900 round figure mark.