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Sep 04 - 11:55 AM

GBP/USD - COMMENT-US Jobs Report Leaves Sterling Shaky As Brexit Worries Mount

By Paul Spirgel  —  Sep 04 - 10:20 AM

GBP/USD fell on Friday as solid jobs data nL1N2G10I6 catapulted the dollar broadly higher, threatening to extend the U.S. currency's upward correction from a summer of losses, while Brexit worries also mounted for the pound.

GBP/USD fell from 1.3275 pre-payrolls to session lows by 1.3199 after the report.

Throughout the pound's summer rally, which culminated in a 2020 high of 1.3481, traders showed scant interest in the EU-UK trade negotiations impasse.
However, diplomats and negotiators say the chances of a no-deal Brexit have risen sharply nL8N2G10PH.

With an end-October negotiating deadline looming [nL8N2G10PH], Brexit should hold more sway on GBP/USD, potentially triggering a test of the 21-daymoving average by 1.3176.

A negotiations breakdown and dip below 1.2997, the 50% Fib of GBP's 1.2512-1.3481 rise, could threaten a series of daily lows down to July 17's 1.2512.

Meanwhile, the U.S. jobs data could change the foreign exchange market's dollar-weakness focus.
It reached a climax after the Fed announced a dovish shift to average inflation targeting, but there are signs that policymakers won't ignore further currency strength versus the dollar Click here .

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GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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