/– GBP/USD takes a U-turn, drops below 1.3550 ahead of NFP | FXStreet

– GBP/USD takes a U-turn, drops below 1.3550 ahead of NFP | FXStreet

  • DXY break higher in Europe.
  • Unperturbed by risk-on.
  • US payrolls in focus.

The GBP/USD pair came under renewed selling pressure and reversed its entire Asian rise, now looking to test the NY lows near 1.3535 region.  

GBP/USD back to test 5-DMA at 1.3540

The spot staged a solid reversal from two-day tops of 1.3577 and eroded nearly 30-pips post-European open, after the USD bulls stormed their way higher, driving the USD index +0.15% higher to hit daily tops at 91.76 levels.

Additionally, a lack of fresh fundamental drivers from the UK docket also collaborated to the downside in the major, as markets preferred to lock-in upbeat UK services PMI inspired gains ahead of the highly influential US NFP data release.

Meanwhile, the risk currency pound also failed to benefit from the risk-on rally seen in the European equities , as the sentiment remains purely driven by the USD dynamics.

All eyes now remain on the US labor market report for the next direction in the pair. US NFP : Expect a deceleration in the pace of job gains in Dec – Goldman Sachs

GBP/USD Technical Levels

FXStreet’s Analyst, Haresh Menghani, writes: “From current levels, the 1.3600 handle, marking 61.8% Fibonacci expansion level of 1.3062-1.3550 up-move, and subsequent retracement, might continue to act as immediate strong resistance, which if conquered sets the stage for an extension of the pair’s near-term bullish momentum back towards 2017 yearly tops resistance near the 1.3655-60 region.”

“On the flip side, bulls might continue to defend a short-term descending trend-line resistance break area, now turned support, near the 1.3500-1.3490 region, below which the pair is likely to accelerate the corrective slide back towards 1.3435-30 zone en-route the 1.3400 handle and 1.3385 horizontal support,” Haresh adds.