GBP/USD fluctuates above 1.2300 in the second half of the day on Thursday. Although the cautious market stance doesn't allow the pair to gather bullish momentum, the lack of US Dollar demand following the weak Jobless Claims data helps it keep its footing.
The Relative Strength Index indicator on the 4-hour chart retreats toward 50 and GBP/USD remains below the 100-period Simple Moving Average (SMA), currently located at 1.2320, after closing the last four candles below that level, reflecting buyers' hesitancy.
On the downside, 1.2270 (Fibonacci 23.6% retracement level of the latest downtrend) aligns as first support before 1.2240 (50-period SMA) and 1.2200 (round level, static level).
In case GBP/USD stabilizes above 1.2320 (100-period SMA), it could face stiff resistance at 1.2360-1.2370 (20-day SMA, Fibonacci 38.2% retracement) before testing 1.2400 (round level, static level).
GBP/USD climbed to a two-week-high near 1.2380 in the European session on Wednesday but lost its traction to close the day marginally lower. The pair edges lower toward 1.2300 in the European morning on Thursday and the technical outlook highlights a loss of bullish momentum in the near term.
The US Dollar (USD) came under bearish pressure in the first half of the day on Wednesday as risk flows dominated the action in financial markets. Although Wall Street's main indexes opened higher, rising US Treasury bond yields helped the USD hold its ground in the American session.
The US Department of Labor will publish the weekly Initial Jobless Claims data later in the day. Investors forecast the number of first-time applications for unemployment benefits to rise to 220,000 in the week ending January 18 from 217,000 in the previous week. A print below 210,000 could allow the USD to gather strength and force GBP/USD to stay on the back foot. In case this data comes in above 230,000, it would point to a cooldown in the labor market and weigh on the USD.
On Friday, preliminary January Manufacturing and Services PMI reports from the UK and the US could provide important directional clues for GBP/USD heading into the weekend.
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