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Forex: GBP/USD bounces from 1.4887 spike low to 1.4950

The GBP/USD is getting deeper into mid-2010 lows as the pair went as low as 1.4887 and July 2010 low was printed at 1.4878. The trigger for the ~150-pip plunge was the improving US labor market data, surprising investors with more jobs and a lower unemployment rate than expected.

US nonfarm payrolls, added 236K jobs in February instead of the 160K consensus. January data, however, was revised lower from 159K to 116K. The unemployment report dropped unexepectedly from 7.9% to 7.7%, against an unchanged consensus. Average weekly hours rose slightly from 34.4 to 34.5 and hourly earnings rose 0.2% in February, as expected.

The GBP/USD, however, recovered the 1.4900 ground and is about at half retracement of the market reaction to the US data, moving around 1.4950.

UBS analysts are bearish: “The pair extends weakness posting a new corrective low. Support is at 1.4949 ahead of 1.4687”, wrote analyst Gareth Berry, pointing to resistance at 1.5110 to hold any upside.

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