- GBP/USD explored the high side on Wednesday but with little momentum.
- The pair remains constrained by key technical averages.
- BoE rate call due on Thursday, US NFP slated for Friday.
GBP/USD found some bidding action amid a broad-market easing in the Greenback. Market sentiment is drifting into the high end as investors recover from the early week’s trade war fears, and Cable traders are buckling down for the wait to the Bank of England’s (BoE) latest rate call.
US ADP Employment Change figures came in stronger than expected in January, showing a net increase of 183K in payrolls, beating the expected fall to 150K from December’s revised print of 176K. ADP job figures are a shaky forecast of US Nonfarm Payrolls (NFP) due at the end of the week, but the upswing is adding to investor confidence that the US economy remains on firm footing.
The BoE is widely expected to cut interest rates by 25 bps on Thursday. Median market forecasts expect the BoE’s Monetary Policy Committee (MPC) to vote eight-to-one to reduce interest rates to 4.5% from 4.75%, with the lone holdout expected to vote to keep interest rates steady for another meeting.
The key data print this week will be US NFP jobs additions on Friday. Investors expect January’s NFP print to ease to 170K from December’s print of 256K. Traders will also be keeping a close eye on revisions to previous months. Market participants hoping for rate cuts have been increasingly frustrated by the latent strength of the US economy, with labor figures routinely getting revised higher after the fact.
GBP/USD price forecast
Cable sprung higher on Wednesday, tapping a fresh three-week high of 1.2550, but price action was squeezed back to the middle. GBP/USD is getting hung up on the 50-day Exponential Moving Average (EMA) near the 1.2500 handle.
