Sterling enjoyed a brief jump after the U.S. payrolls report showed a rise in the unemployment rate that supported the case for a rate cut at the Fed’s final policy meeting of the year, but lack of follow-through gains underpinned the view that alternatives to the dollar are lacking.

Add to that the fact that Fed officials appear to be setting the stage for a possible rate pause in Q1 and the environment remains conducive to dollar strength.

Consequently, with GBP/USD stalling ahead of resistance at the 200-day moving average at 1.2821, focus is once again the 1.27 handle.

UK news flow remains light and with little uncertainty over the Bank of England’s policy outlook in the short run as officials stick to the gradual easing script, the dollar side of the equation should continue to drive the action.

For now, range trading appears to be the name of the game and thus it may take until the release of the latest U.S. CPI report to provide a clearer sense of direction.

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