Comment: Focus on potential sterling downside heading into US payrolls

Noram Lithium

02/05/2024 15:41

GBP/USD slid on Thursday and was last down 0.3% at 1.2489 after a bid gave out
ahead of 200-DMA resistance at 1.2550 in early NorAm, with traders preparing for
an upcoming non-farm payrolls report that could test support if it comes in
above expectations.
    Though cable firmed following Wednesday's Fed meeting -- with the help of
Chair Jerome Powell, who removed the remote risk of a rate hike -- rising
further away from its late-April low near 1.23, the pair remained rangebound
this week, trading between its 10-DMA at 1.2472 and 200-DMA currently at 1.2550.
    The pound weakened after Thursday's below-forecast jobless and continuing
claims data, highlighting the data-dependent status of markets attempting to
discern how quickly and deeply upcoming rate cuts will be.
    That leaves Friday's payroll data as the next key input.
    Should U.S. payrolls or earnings data come in above forecast, recent
less-hawkish Fed expectations are likely to abate and 10-DMA support might give
way, facilitating a test of the April 22 2024 low at 1.2299. 
    For more click on  FXBUZ 

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 (Paul Spirgel is a Reuters market analyst. The views expressed are his own)
 ((paul.spirgel@thomsonreuters.com))