- GBP/USD remains on the defensive near a multi-week low amid sustained USD buying.
- Thursday’s upbeat US data reaffirms hawkish Fed expectations and underpins the USD.
- The focus remains glued to the release of the closely-watched US monthly jobs report.
The GBP/USD pair struggles to gain any meaningful traction on Friday and oscillated in a narrow trading band through the first half of the European session. The pair is currently placed just below the 1.1900 mark, or a fresh six-week low touched in the last hour.
Thursday's upbeat US macro data continues to boost the US Dollar for the second successive day, which, in turn, is seen as a key factor acting as a headwind for the GBP/USD pair. In fact, the better-than-expected ADP report on the US private-sector employment and Initial Jobless Claims pointed to a resilient US labour market.
This further suggested that the economy ended 2022 on solid footing and could allow the Federal Reserve to stick to its aggressive rate hike path. That said, subdued action around the US Treasury bond yields fails to impress the USD bulls and could lend some support to the GBP/USD pair ahead of the closely-watched US jobs data.
The popularly known US NFP report, due for release later during the early North American session, could influence the Fed's near-term policy outlook. This, in turn, will play a key role in driving the USD demand and provide a fresh directional impetus to the GBP/USD pair. The bleak outlook for the UK economy, meanwhile, still favours bearish traders.
Hence, any attempted recovery could now be seen as a selling opportunity and runs the risk of fizzling out. The GBP/USD pair seems vulnerable to extending its recent pullback from the vicinity of mid-1.2400s, or the highest level since June 2022. Nevertheless, spot prices remain on track to register heavy weekly losses, marking the third in the previous four.
Technical levels to watch
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