GBP/USD spikes to over one-week tops, around 1.3970 on weaker NFP report

The GBP/USD pair caught some aggressive bets during the early North American session and shot to over one-week tops, around the 1.3970 region in reaction to the dismal US jobs report.

The headline NFP showed that the US economy added only 266K new jobs in April as compared to consensus estimates pointing to a reading of nearly one million. Adding to this, the previous month's reading was also revised down to 770K from 916K reported previously and the unemployment rate unexpectedly edged higher to 6.1% from 6.0% in March.

The disappointing details reaffirmed market expectations that the Fed will keep interest rates low for a longer period and triggered some aggressive selling around the US dollar. This, in turn, was seen as a key factor that provided a modest lift to the GBP/USD pair. However, the uncertainty over the outcome of the Scottish election might cap the upside.

Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the key 1.4000 psychological mark before traders start positioning for any further near-term appreciating move.

Technical levels to watch