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GBP/USD Falters Amid USD Strength and Mixed Economic Signals

In early Asian trading on Thursday, the GBP/USD pair experienced a downward adjustment, remaining above the mid-1.2500s, primarily influenced by a strengthening US Dollar (USD). With no significant economic releases from the UK this week, the pair’s movements are largely driven by the dynamics of the USD.

As of now, the pair trades at 1.2560, marking a slight 0.03% increase for the day.Despite Federal Reserve Chair Jerome Powell’s recent indication of potential policy tightening, market sentiment suggests the tightening phase might have concluded. Analysts, according to a Reuters poll, now expect the Fed to maintain interest rates at least until July, a delay from previous projections.

In recent data, Automatic Data Processing Inc. reported a rise in ADP private payrolls by 103K in November, falling short of the expected 130K and indicating a slowdown from October’s 106K.On the UK front, Bank of England Governor Andrew Bailey emphasized the need for maintaining current interest rates for a prolonged period, acknowledging the financial stability risks involved.

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He also highlighted the challenges posed by China’s economic struggles, potential conflicts in the Middle East, and high public debt levels, factors that could pressure the British Pound (GBP) and affect the GBP/USD pair.

Looking ahead, market focus shifts to the upcoming US Weekly Jobless Claims and the highly anticipated employment data on Friday, including the Nonfarm Payrolls and Unemployment Rate. The Nonfarm Payrolls are projected to show an addition of 185K jobs, while the Unemployment Rate is expected to hold steady at 3.9%.

GBP/USD Technical Outlook

From a technical perspective, the GBP/USD pair recently exhibited negative momentum, breaking below the 1.2590 level and forming a double top pattern, suggesting a bearish outlook targeting the 1.2460 areas. The bearish trend is further supported by the pair’s movement below the EMA50, with a breach of 1.2590 potentially reversing the current downward pressure.

The trading range for today is expected between 1.2460 support and 1.2610 resistance, maintaining a bearish trend for the day.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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