GBP/USD up-move stalls ahead of 1.2700 handle, NFP in focus

   “¢   A subdued USD demand helped build on the overnight strong recovery.
   “¢   The British Pound gets an additional boost from upbeat UK services PMI.
   “¢   US monthly jobs report and Juncker/May phone call eyed for fresh impetus.

The GBP/USD pair stalled its intraday positive momentum ahead of the 1.2700 handle and has now retreated around 25-pips from daily tops.  

A combination of supporting factors helped the pair to build on its overnight swift recovery from flash crash low to sub-1.2400 level, the lowest since April 2017, and continue gaining traction on the last trading day of the week.  

Against the backdrop of a subdued US Dollar price action, despite a goodish pickup in the US Treasury bond yields, the pair got an additional boost from surprisingly stronger than expected UK services PMI print for December.

The uptick, however, lacked strong follow-through as traders seemed to refrain from placing aggressive bets ahead of today’s key event risk – the release of keenly watched US monthly jobs report, popularly known as NFP.

Meanwhile, fresh Brexit-related headlines, coming out of the EU President Jean-Claude Juncker’s phone call with the UK PM Theresa May this afternoon, should influence the British Pound and also produce some meaningful trading opportunities.  

The key focus, however, will be on the UK Parliament debate on the PM May’s Brexit agreement, set to resume in the week of January 7, which will be followed by the meaningful vote, planned to be held before January 21.  

Technical outlook

Mario Blascak, FXStreet’s own European Chief Analyst writes: “With GBP/USD resuming sideways trend, a short-term recovery towards 1.2700 and above is not enough to reverse the trend. With Brexit deal uncertainty weighing on Sterling, a fundamental pressure is still in place to see GBP/USD falling further towards 1.2500-1.2440 level.”