Cable Plunges Sharply Ahead of NFP News Release

The Great Britain Pound (GBP) fell broadly against the US Dollar (USD) yesterday, dragging the price of GBPUSD to less than 1.2550 amid some key economic events. The same trend is expected to continue today ahead of the Nonfarm Payroll news. The technical bias remains bearish because of a lower high in the recent upside wave.

Technical Analysis

As of this writing, the pair is being traded around 1.2523. A support can be noted around 1.2521, a short term horizontal support zone ahead of 1.2300, the confluence of psychological number as well as trendline support and then 1.1916, the swing low of 2016.

On the upside, a hurdle can be noted near 1.2650, the psychological number ahead of 1.2774, the swing high of the last major upside rally and then 1.3444, the high of October 2016 as demonstrated in the given above daily chart. The technical bias shall remain bearish as long as the 1.2774 resistance area is intact.

US Jobless Claims

The number of Americans filing for unemployment benefits fell more than expected in the past week. Initial jobless claims were down 14,000 from the previous week at 246,000, the Labor Department said. The previous week’s figure was revised to 260,000 from an initial reading of 259,000. Economists had expected jobless claims to fall to 250,000. U.S. nonfarm payroll data for January is due to be released today during New York session.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term. It is recommended to place all trades with tight money management ahead of the nonfarm payroll report.'
Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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