The GBPUSD currency pair quotes remain under pressure on Friday. Attempts to recover from recent declines are limited as investors are cautious ahead of the US jobs data release.
The key factor for further movement of the pair will be the non-farm payroll report in the US. According to market expectations, the U.S. economy added 170 000 jobs in December (vs. 256 000 in November) and the unemployment rate remained at 4.1%. In addition, the average weekly wages data will also have an impact on the US dollar exchange rate, determining its further dynamics.
Fundamental factors do not support the dollar. Expectations of rate cuts by the Federal Reserve (Fed) twice this year keep US Treasury bonds near their lowest since December, limiting demand for the US currency. However, GBPUSD's upside potential is constrained by the Bank of England's weak outlook.
On Thursday, the Bank of England cut its interest rate by 25 basis points to 4.5 % and worsened the UK's economic growth forecast for 2025. The head of the bank Andrew Bailey also noted that he expects further easing of monetary policy this year. These factors exert additional pressure on the pound.
From a technical point of view, GBPUSD quotes broke out of the downtrend on the daily timeframe (D1). However, the price failed to show impulsive growth.
On the H4 timeframe, a correction is forming above the broken downtrend of the older period. The volumes of Moving Average of Oscillator indicator (with parameters 12, 26, 9) are increasing in the negative zone. This strengthens the signal to sell the pair and the price return to the descending corridor.
Short-term prospects for the GBPUSD currency pair suggest selling with the target of 1.2110. Part of the profit should be taken near the level of 1.2290. A Stop-loss could be set at 1.2650.
Since the bearish trend is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.
This content is for informational purposes only and is not intended to be investing advice.
