GBP/USD: Bears take control ahead of NFP

GBP/USD has dropped below 1.3300 on renewed dollar strength. As FXStreet’s Eren Sengezer notes, technicals turn bearish as buyers fail to lift cable above key hurdles ahead of US jobs report.

Near-term technical outlook turns bearish

“Investors forecast Nonfarm Payrolls (NFP) to rise by 550K. However, market participants will pay close attention to wage inflation. A stronger-than-anticipated print could trigger another leg higher in the US Dollar Index as it would reaffirm the Fed's tightening prospects.” 

“Even if a disappointing jobs report weighs on the greenback, the dollar sell-off is likely to remain short-lived as Fed policymakers won't have enough time to adjust their commentary ahead of the blackout period that starts on Saturday.”

“On the four-hour chart, GBP/USD trades below the 20-period and the 50-period SMAs. Additionally, the Relative Strength Index (RSI) indicator stays below 50, suggesting that sellers are starting to dominate the pair's action in the near-term.”

“GBP/USD is testing 1.3280 static support. In case this level turns into resistance, the next target on the downside aligns at 1.3240 (static level) before 1.3200/1.3195 (psychological level/ November 30 low).” 

“Resistances are located at 1.3300 (psychological level, 20-period SMA), 1.3320 (50-period SMA) and 1.3360 (static level).”

See – NFP Preview: Forecasts from 10 major banks, strong print to reinforce Fed's recent hawkish pivot