The Pound is trading thinly atop Thursday’s gains with US NFP looming in the upcoming session.
The GBP/USD is trading range bound near the 1.3000 major handle after Thursday’s rally on refreshed Brexit hopes as the Cable heads into Friday’s action ahead of another bumper US NFP showing. The Sterling saw some much-needed lift yesterday after headlines broke that some progress may finally be being made on EU-UK Brexit negotiations; yesterday saw EU leaders in Brussels soothe financial markets with the announcement that European traders will maintain access to critical UK derivatives settling mechanisms in the event of a messy Brexit, but the headlines were good enough for Pound bulls to spark a brief rally. Pressure on the US Dollar in the broader forex market helped to send the Greenback lower across the board, and the GBP/USD is enjoying a reprieve from normal selling.
Sterling’s Positive Momentum Unaffected By Disappointing UK Manufacturing PMI
As of writing this article, GBP/USD pair is trading near flat at 1.3007 down by 0.05% on the day. A Times of London report said that the UK PM Theresa May has struck a deal to give UK financial services companies continued access to European markets after Brexit. The report added to overnight optimism triggered by the UK Brexit Secretary Dominic Raab’s letter to the House of Commons Brexit Committee, saying that he expected to finalize a deal with the European Union by Nov. 21, and prompted some aggressive short-covering move around the GBP/USD major. The positive momentum seemed rather unaffected by disappointing UK manufacturing PMI and dismissal of the news regarding a Brexit financial services deal by the UK/EU officials.
Meanwhile, bullish traders took cues from a more hawkish-than-expected BOE rate hike outlook, noting that more rate hikes might be needed as there could be overheating in the economy during the second half of 2019. On release front today, US markets will see release of NFP report, dropping at 12:30 GMT and markets will be coiling ahead of the key jobs report, but before that will be the UK’s Construction PMI for October (forecast 52.0, last 52.1), at 09:30 GMT. US Average Hourly Earnings are expected to increase to 3.1% for the year into October (last 2.8%), while NFP is expected to show 190 thousand new jobs compared to last month’s reading of 134 thousand. greenback. US Greenback is also expected to see some downside move over positive headlines relating to Sino-U.S. Trade talks ahead of US NFP data. Expected support and resistance for the pair are at 1.2980, 1.2935, 1.2900 and 1.3045, 1.3090, 1.3130 respectively.