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Feb 05 - 11:55 AM

GBP/USD - COMMENT-US Payrolls Disappointment Gives Sterling An Opening

By Paul Spirgel  —  Feb 05 - 10:00 AM

Sterling rallied on Friday after U.S. nonfarm payrolls figures and downward revisions nL1N2KA34D disappointed rising expectations following a string of strong data, which could provide impetus for cable to push above its 2021 high at 1.3759.

The U.S. report, coupled with weak Canadian payroll data nT5N2JF002, suggested that the North American COVID recovery has not yet transformed into the juggernaut that markets had imagined.

That presents an opening for sterling as the rapid UK vaccine rollout has increased expectations that Britain can move closer to the head of the economic recovery class than the rear.

GBP/USD has kept near its recent trend highs, while the data puts more focus on efforts in Congress to craft and approve a U.S. COVID relief package, which could temper dollar enthusiasm until the bill is closer to completion.

A rise above 1.3759 would target the April 2018 weekly high at 1.3792 and then the upper 30-day Bolli at 1.3828.

Support can be found at 1.3633, the 30-day moving average, Thursday's low 1.3566 and the lower 30-day Bolli at 1.3492.
A break below 1.3474, the 50% Fib of 1.3190-1.3759, would shift control to bears.
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Source:
Refinitiv IFR Research/Market Commentary

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