Forex News

GBP/USD carries BOE-led gains on UK holiday, US NFP in focus

  • GBP/USD remains positive on a day, except for the latest pullback.
  • BOE managed to strike an upbeat tone despite conveying pandemic fears.
  • UK PM Boris Johnson will announce guidelines on easing lockdown restrictions on Sunday.
  • US NFP, Unemployment Rate likely to bears the burden of coronavirus.

GBP/USD steps back from the intraday top of 1.2408 to currently around 1.2394, up 0.21% on a day, while heading into the European open on Friday. Despite the latest pullback, mainly due to the US-China trade optimism, the Cable pair remains positive while extending the BOE-led gains on the day of the UK’s holiday.

The US Dollar Index (DXY) recently gained bids following updates suggesting fresh trade/economic talks between the US and Chinese policymakers. The world’s top economies were at loggerheads and triggered fears of trade war earlier during the month.

The latest risk-on helps the US 10-year Treasury yields to stop the previous day’s fall around 0.64% while also helping stocks in Asia to remain upbeat.

On the other hand, the Tory government keeps lagging its promises to combat the coronavirus and witnesses heavy criticism among the opposition and public. In addition to the earlier shortfall of medical supplies, the government’s ability to reach the target of 100,000 testings a day for the fifth day in a row also gets red-eyes. The latest figures suggest that the UK’s death toll rose 539 to 30,615 in the 24 hours up to 9:00 am on May 07.

Elsewhere, Brexit talks are also warning the Cable buyers as the Independent said, “the UK is showing ‘no real sign’ of approaching Brexit trade talks with a plan to succeed during the coronavirus pandemic, the EU’s trade commissioner has said.”

Moving on, the Early May holiday in the UK could restrict the pair’s momentum ahead of the US Nonfarm Payrolls (NFP) and Unemployment Rate data for April. Forecasts suggest the NFP drop by -20000K versus -701K prior whereas Unemployment Rate could spike to 14% from 4.4%.

Read: US Non-Farm Payrolls April Preview: Emotions or facts for the markets

Additionally, the UK PM Johnson will reveal the guidelines on how the economy will scale down the restriction levied due to the virus outbreak. “The PM says the government will proceed with “maximum caution” when considering easing coronavirus restrictions,” said the BBC.

Technical analysis

A sustained pullback from monthly support line and a Bullish Spinning Top candlestick on Thursday’s daily chart direct Cable buyers towards a 21-day SMA level of 1.2440. Though, 61.8% Fibonacci retracement of March month fall and 200-day SMA, respectively near 1.2515 and 1.2660 can challenge the bulls afterward. Meanwhile, the previous day’s low of 1.2266 and April 21 low near 1.2245 offer strong supports to the pair.

 

Source Link