GBP/USD flirting with lows near 1.2380, Payrolls eyed

After climbing as high as the 1.2430 during overnight trade, GBP/USD has now surrendered those gains and retreated to the 1.2380/75 band, or daily lows so far.

GBP/USD eyes on NFP

The pair is losing ground for the first time after two consecutive advances, finding quite decent support in the 1.2200 neighbourhood while earlier tops around 1.2430 seems to be capping the upside for the time being.

The greenback seems to have recovered from the recent sell-off giving some respite to the US Dollar Index and encouraging the ongoing correction lower in the risk-associated space.

GBP’s upside momentum has been propped up by the persistent offered bias surrounding the buck at the beginning of the year and solid performance from UK fundamentals, as all PMIs this week have surpassed expectations, adding to the idea that the economy keeps weathering well (at least better than initially estimated) the post-Brexit vote.

In the data space, nothing is scheduled in the UK, whereas December’s Non-farm Payrolls in the US will grab all the attention seconded by Factory Orders for the month of November. Additionally, Chicago Fed C.Evans (voter, dovish) and Richmond Fed J.Lacker (2018 voter, hawkish) are due to speak later in the session.

GBP/USD levels to consider

As of writing the pair is retreating 0.34% at 1.2376 and a break below 1.2198 (low Jan.3) would aim for 1.2112 (low Oct.28) and then 1.2081 (low Oct.25). On the upside, the initial hurdle lines up at 1.2431 (high Jan.6) followed by 1.2633 (100-day sma) and finally 1.2729 (high Dec.13 2015).