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GBP/USD has been extending its gains after the Bank of England clarified that it is all but abandoning setting negative rates. The cable is set to attack 2021 highs as US Nonfarm Payrolls, which carry high expectations, may trigger a dollar downfall, FXStreet’s Analyst Yohay Elam reports.

See – Nonfarm Payrolls Preview: Forecast from 10 major banks for January jobs report

Key quotes

“US figures have been robust throughout the week, raising expectations for Friday’s Nonfarm Payrolls report and boosting the greenback. While the economic calendar is pointing to an increase of 50,000 jobs, investors are eyeing higher levels and that may trigger a ‘buy the rumor, sell the fact” response weighing on the dollar. That could send GBP/USD to new highs.” 

“While the White House continues talking with moderates, Democrats are advancing legislation to approve a stimulus package on their own – potentially a larger one. Higher prospects of a generous package may send investors away from bonds, raising yields and supporting the dollar. However, that may come over the weekend.” 

“Pound/dollar has recaptured the broken uptrend support line that accompanied it since late 2020 and also surpassed the 50 Simple Moving Average on the 4-hour chart. Moreover, momentum has flipped back to the upside.”

“Resistance awaits at 1.3725, a high point in January, followed by 1.3752, the 2021 peak. Support awaits at 1.3680, which is where the 50 SMA hits the price. It is followed by 1.3614, a support line from early in the week.”