GBP/USD: subdued below 1.3380 post big European slide
- GBP/USD consolidating below the hourly 10-SMA.
- GBP/USD moving around on Brexit headlines.
- GBP/USD to make it to the 1.3658 September high?
GBP/USD has started to stablise after a bought of supply in late Asia and early European sessions in a volatile pair that is changing hands depending on what direction the fickle sentiment over Brexit is going. GBP/USD has Currently, GBP/USD is trading at 1.3374, down -0.52% on the day, having posted a daily high at 1.3450 and low at 1.3358.
We had the DUP leader Foster recently saying that they will not be rushed to Brexit border text all the while that the clock is ticking towards "deadline of deadlines" for the Brexit divorce offer sending the EUR/GBP cross up to 0.8853 intra-day highs during the European morning and cable down to the aforementioned lows.
Meanwhile, the ADP has come in as expected at 190k vs 235k prior and the dollar has caught a broad-based bid. This data leaves the NFP's report of Friday in good sted, although there is a strong weight to the services sector (lower paid/skilled) in this ADP report, providing 155K jobs. For Friday, the median expectation in the Bloomberg survey is that the US economy created net new 200k jobs in November. Last year, the non-farm payrolls rose an average of 187k a month.
Recent US data:
- US: Non-manufacturing sector grew at a slower rate in November - ISM
- US: Service sector output expansion softens to 5-month low - Markit
- US: Private sector employment increased by 190,000 jobs in November - ADP
Analysts at Commerzbank noted that GBP/USD eased back slightly yesterday following its break above major resistance (2014-2017 downtrend) at 1.3445, we have seen a weekly close above the 2014-2017 downtrend.
This has introduced scope to the 1.3658 September high. It stays immediately bid above the 1.3338 mid-October high. Only below 1.3338 would alleviate immediate upside pressure and allow for weakness back to the 1.3130 2016-2017 uptrend. Where are we wrong? The 1.3130 2014-17 uptrend represents the breakdown point to 1.2830/1.2774, the 38.2% retracement and August low, and the 1.2575 50% retracement