Gbpusd Bears Prevail After Us Pmi And Nfp Release

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Gbpusd Bears Prevail After Us Pmi And Nfp Release

GBP/USD Bears Prevail After US PMI & NFP Release

The GBP came under selling pressure after the release of the US PMI and the NFP data. The recent NFP data was mixed at best, but the PMI was better than expectations, which pushed the US bond yields higher.

As a result, the US Dollar also gained strength against the Pound Sterling and thus pushed the GBP/USD below the 1.2712 (daily high). After turning bearish, the Pound/Dollar pair now trades near the 1.2590s, which signifies a major trend change from its earlier direction.

If we look at the GBP/USD fundamentals, the business activity in the USA has improved while the UK factories face the recession risk. In addition, the NFP data showed that 187,000 jobs were generated during August, while the unemployment rate jumped to 3.5%. So, on that front, there's now less chance of September's hike as well as the hike in November.

US Bond Yields Surge After NFP

Another factor that strengthens the case of a bearish GBP/USD is the US-bond yields, which have refreshed highs after the data. It has allowed the DYX to reclaim the 104 level and thus is making it difficult for the GBP bulls to show their strength.

The D1 chart of GBP/USD tells us that the bias is neutral to bearish, which could turn fully bearish if the pair closes below 1.2590 on the daily chart. Once the GBP bears clear this hurdle, the next step will be the 1.2550 and the 1.2575. After that, we have the 1.2548 level, which is the swing slow from the 23rd of August.

The bigger picture is that the USD has regained its strength after the PMI and the NFP report. On the other hand, there is no such fundamental data that supports the case of a stronger GBP. So, even if we leave technicals aside for a moment, the current trend of the GBP/USD is geared towards the downside.

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