Search ForexCrunch
  • The UK services PMI and the US employment stats to dominate major moves amid local election results from the England and Northern Ireland.
  • Developments concerning Brexit can also play their role.

The GBP/USD pair trades around 1.3040 while heading into the London open on Friday after the BOE’s Brexit pessimism and the broad USD strength hammered it down the previous day.

In spite of upwardly revising quarterly growth outlook, the Bank of England (BOE) couldn’t please the Cable buyers as the Governor Mark Carney’s concern over Brexit derailed investor optimism.
Adding to the weakness could be the US Dollar (USD) strength on the back of upbeat employment and factory order stats.

Looking forward, pair traders will first confront April month Markit services purchasing manager index (PMI) from the UK prior to witnessing the market reaction to the US employment data.

The British services PMI, a key component of the UK GDP, is expected to recover from last month’s disappointing figure of 48.9 to an expansion signaling number of 50.5.

Further, the US nonfarm payrolls (NFP) could retrace a bit to 185K from 196K previous while average hourly earnings might increase to 3.3% versus 3.2% earlier. Also, the unemployment rate may remain unchanged at 3.8%.

It should also be noted that results from the council and mayoral elections in England and Northern Ireland will soon be announced. The early count shows that neither ruling Tories nor opposition Labour is in the lead as they bear the fruits of downbeat performance on Brexit.

Additionally, the cross-party Brexit talks are moving in a positive direction but still have a long way to go as neither Tories nor Labour wish to relinquish their demands.

Technical Analysis

While 50-day simple moving average (SMA) near 1.3105, followed by 1.3130, hold the gate for 1.3200, sellers can aim for 1.3000, 100-day SMA level of 1.2980 during the quote’s pullback.