GBP/USD: Heavy, 1.3400 tested on US NFP
- Sell the fact trading on Brexit deal dominates.
- UK industrial/ manufacturing production data ignored.
- Mixed US jobs data offer some support.
The GBP/USD pair dropped to test the 1.3400 mark on the release of the US Nov jobs report, before attempting a minor recovery towards 1.3430 levels.
GBP/USD: Vulnerable below 1.3400
The selling pressure behind the GBP/USD pair remains unabated amid ‘Sell the fact’ trading adopted by the markets after the UK PM May reached a historic Brexit deal with the EU in Brussels earlier today.
Moreover, the latest comments by an EU official, citing that it’s unrealistic to expect the Brexit trade talks to start by March 2019, exacerbated the pain in the pound. Cable accelerated its decline and tested the key support at 1.3400 levels after the US headline NFP numbers surprised markets to the upside.
However, the bulls were soon offered some respite, as markets digested the US average hourly earnings data, which came in below expectations. The US States Average Hourly Earnings (MoM) registered at 0.2%, below expectations (0.3%) in November.
Markets now await the sentiment on the Wall Street and the US prelim UoM consumer sentiment data for fresh trading impetus.
GBP/USD Technical Levels
According to Valeria Bednarik, Chief Analyst at FXStreet: “The 4 hours chart shows that the price is breaking below its 20 SMA which converges with a Fibonacci level at 1.3430, while the RSI indicator turned lower, now at 48, as the Momentum hovers around its mid-line. The main support is now 1.3390, with a break below it opening doors for a steeper decline towards 1.3345, the 61.8% retracement of its latest bullish run, ahead of the 1.3300 figure. Support levels: 1.3390 1.3345 1.3300. Resistance levels: 1.3450 1.3485 1.3520.”