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Jan 08 - 11:55 AM

GBP/USD - COMMENT-US Jobs Miss Sends Sterling Higher, 1.3703 Trend High In Focus

By Paul Spirgel  —  Jan 08 - 09:39 AM

Sterling rallied to a session high at 1.3626 after U.S. non-farm payrolls data EMnL1N2JI3BK came in below consensus forecasts, despite revisions that lifted prior releases.

Cable was trying to finish the week on firm footing after bears sold the pound from Monday's 33-month high by 1.3703 when the UK's third pandemic lockdowns increased BoE negative rate expectations nL1N2JJ0LM, pushing the pound to its 2021 low so far at 1.3533 on Jan 7 nL1N2JJ19T.

The shallow GBP/USD selloff hints that sterling bulls remain engaged.
After three successive probes below rising 10-day moving average support, currently at 1.3576, the pound remains resilient, not venturing too far away from Jan.
4's 1.3703 trend high.

With the 10-DMA holding, and the dollar broadly weaker after the jobs miss, sterling bears may abandon their efforts, helping push the pound higher.

The first hurdle for bulls is the 1.3700 area, with resistance at 1.3694, the upper 30-day Bolli, and 1.3703, Jan.
4's high.
That's followed by 1.3745, the upper 30-week Bolli, and 1.3792, the April 30 2018 high.

Though a close below the 10-DMA would weaken the bullish structure, bulls are likely to remain in control above 1.3447, the 50% Fib of 1.3190-1.3703's December-January rise.
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Source:
Refinitiv IFR Research/Market Commentary

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