GBP/USD falls to test 1.4100, erases weekly gains

• Cable erases weekly gains after NFP 
• GBP/USD tests support at 1.4100 amid US dollar strength

GBP/USD has extended its march south over the last hours, making fresh 3-day lows at the 1.4100 area, as the dollar was bolstered by better-than-expected US labor data.

The greenback strengthened across the board after the US nonfarm payrolls report showed the economy added 200,000 new jobs in January, above the 180,000 expected and following a revised 160,000 job gain in December. The unemployment rate remained flat at 4.1% as expected. In addition, the key average hourly earnings – a proxy for wage inflation - rose at an annualized 2.9%, above initial forecasts.

Stronger-than-expected data also pushed the 10-year US Treasury yields to multi-year highs as it fueled expectations of a March rate hike by the Fed.

GBP/USD dropped more than 120 pips over the last hours and hit its lowest level since Jan 30 at 1.4100. At time of writing, the pair is trading at 1.4123, 0.86% below its opening price. Cable is on track to post its first daily loss after three consecutive days of gains, erasing almost completely its weekly advance.

GBP/USD technical levels

As for technical levels, next supports are seen at 1.4100 (intrada low/psychological level) and 1.3978 (Jan 30 low) ahead of 1.3915 (20-day SMA). On the flip side, resistances could be found at 1.4277 (intraday high), 1.4344 (Jan 25 high) and 1.4400 (psychological level).