GBP/USD: Rebound capped near 1.2935, as focus shifts to NFP

Despite a solid UK manufacturing PMI report, the GBP bulls struggle to extend the bounce above 1.2935 levels, leaving the GBP/USD pair in a phase of consolidation ahead of the all-important US payrolls data.

GBP/USD: Attention turns towards US NFP

The GBP/USD pair is trying hard to regain the bids above 1.29 handle, as markets turn cautious and refraining from placing any fresh bets on the spot heading into the US NFP data.

Markets are expecting the US NFP and hourly wages data to come in weaker for the month of August, however, any positive surprise could take the rate back towards yesterday’s low of 1.2853 en route 1.2800 levels.

Moreover, mixed market sentiment amid higher European equities and tumbling oil prices also dampen the sentiment around the risk currency GBP, keeping the upside in check.

However, the major survives above 1.2900 levels, as upbeat UK manufacturing sector activity continues to offer support to the pound.

Calendar-wise, apart from the US NFP release, the ISM manufacturing PMI report and revised consumer sentiment data will also hold significant relevance for the USD.

GBP/USD levels to consider             

Slobodan Drvenica at Windsor Brokers Ltd., explains, “Near-term action remains supported by rising 100SMA (currently at 1.2909) after three spikes below failed to close under 100SMA. Mixed daily studies also give no clear direction signal, with daily cloud boundaries: 1.2873 (base, reinforced by Tenkan-sen line) and 1.2975 (top) marking initial pivotal points. Break of either side is needed to generate initial direction signal.”

“At the upside, psychological 1.3000 and daily Kijun-sen at 1.3020, mark next triggers for stronger correction of 1.3268/1.2773 descend. Conversely, firm break below daily cloud would risk extension towards next key support at 1.2773 (24 Aug trough). Res: 1.2946; 1.2975; 1.3000; 1.3020 Sup: 1.2905; 1.2873; 1.2852; 1.2793,” Slobodan adds.