GBP/USD Held Ahead of US Nonfarm Payrolls Data
The GBP/USD pair moved flat and held around 1.3435 during Friday's Asian session, still near its weekly low. After declining for three consecutive days, market participants opted to hold positions while awaiting the release of US employment data (Nonfarm Payrolls/NFP) tonight.
The NFP data is seen as important because it will provide clues to the direction of the Fed's next interest rate policy. This data has the potential to significantly move the US dollar, thus determining the direction of GBP/USD in the short term.
Ahead of the data release, the US dollar did not continue to strengthen, despite briefly approaching a one-month high. This was because the market still saw the possibility of further interest rate cuts by the Fed, while stock market conditions were relatively stable, restraining aggressive demand for the dollar.
From the UK side, the pound received support from the Bank of England's (BoE) stance, which was considered less dovish. The BoE signaled that interest rates were approaching a "neutral" level, which reduced downward pressure on the pound and helped limit the decline in GBP/USD.
Technically, further downside room will open if GBP/USD can break through and hold below 1.3400. As long as that level remains intact, there's still room for buying on price weakness, so traders are advised to avoid taking aggressive bearish positions until further confirmation is received. (asd)
Source: Newsmaker.id
