GBPUSD Hangs On to Support at 1.3000 Following Positive US Data
Just like its non-commodity dollar counterparts, the pound fell victim to dollar strength in yesterday’s trading. GBPUSD initially traded higher on news of a coronavirus vaccine to its intraday high at 1.3068. However, the currency pair quickly gave up its gains following the better-than-exected US reports. By the end of the New York session, GBPUSD was down 28 pips from its opening price at 1.3000.
Yesterday, the ADP employment change report beat expectations. It printed at 291,000 for January which was significantly higher than the forecast at 157,000. This report is privately-produced and is meant to predict the official government data which is due on Friday. Consequently, sparked optimism for the highly-anticipated NFP report.
Making things more bearish for GBPUSD was the ISM non-manufacturing report for January. Analysts had forecasted it at 55.1 but the actual number came in higher at 55.5 which hints that the US services sector is expanding strongly.
Today, there are no top-tier data scheduled from both the UK and the US. This means that GBPUSD will likely be left vulnerable to market sentiment. Positive developments on a coronavirus cure will likely be bullish for GBPUSD so keep tabs on our website as we update you on the latest news.
On the 4-hour time frame, we can see that despite yesterday’s slide, GBPUSD is still trading within its previous lows. The 1.3000 psychological handle has proven to be a reliable support level for the currency pair since mid-January.A closer look at the hourly time frame shows that buyers and sellers are neck-and-neck with each other. This becomes apparent when you connect the lower highs and higher lows that GBPUSD has been making. A close above yesterday’s high at 1.3068 could indicate that there are enough buyers in the market to push the currency pair to its January 31 high above 1.3200. On the other hand, a close below yesterday’s low at 1.2954 may be enough to trigger a sell-off to 1.2800 where GBPUSD bottomed in December.More content