GBP/USD – British pound edges down despite weak ADP nonfarm payrolls

GBP/USD has edged lower in the Wednesday session. In North American trade, the pair is trading at 1.3147, down 0.24% on the day. There are no major British events on the calendar. In the U.S., ADP nonfarm payrolls disappointed, falling to a 3-month low. The indicator fell to 183 thousand, down from 213 thousand in the previous release. On Thursday, the U.S. releases unemployment claims.

Ahead of Brexit, investors will be watching British economic data closely, and soft numbers could trigger a loss of confidence in the U.K. economy and the British pound. February PMI reports have been soft, and the pound has responded this week with slight losses. On Wendesday, Services PMI edged up to 51.3, above the 50-level which separates contraction from expansion. Still, the reading points to stagnation in the services sector. Earlier in the week, construction PMI dropped to 49.5, the first time that the PMI has indicated contraction since March 2018. The turmoil over Brexit is at least partly to blame for soft construction numbers, as clients re-evaluate whether to take on commercial projects in a time of uncertainty. Last week, manufacturing PMI dipped to 52.0, marking a 4-month low. Aside from Brexit jitters, the U.S.-China trade war has also taken a toll on the economy, in particular on the export and manufacturing sectors.

The bitter trade battle between the U.S. and China may not be over, but there are clear signs that tensions between the two super-economies have eased considerably. The sides have completed four rounds of talks, and all signs are pointing to progress in the trade war, which has dampened global growth. A breakthrough would herald a new trade relationship between the U.S. and China, and stronger risk appetite could boost the greenback’s rivals, such as the pound.

Euro trades softer as ECB looms

Dollar mixed after ECB cuts outlook and markets await US-China trade details

GBP/USD Fundamentals

Wednesday (March 6)

  • 7:15 British MPC Member Cunliffe Speaks
  • 8:15 US ADP Nonfarm Employment Change. Estimate 190K. Actual 183K
  • 8:30 US Trade Balance. Estimate -57.8B. Actual -59.8B
  • 10:30 US Crude Oil Inventories. Estimate 1.2M. Actual 7.1M
  • 12:00 US FOMC Member Williams Speaks
  • 14:00 US Beige Book

Thursday (March 7)

  • 8:30 US Unemployment Claims. Estimate 225K

*All release times are EST

*Key events are in bold

GBP/USD for Wednesday, March 6, 2019

GBP/USD March 6 at 12:00 EST

Open: 1.3179 High: 1.3179 Low: 1.3124 Close: 1.3147

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2831 1.2910 1.3070 1.3170 1.3258 1.3362

GBP/USD edged lower in the Asian session. The pair was flat for most of the European session and is showing limited movement in North American trade

  • 1.3070 is providing support
  • 1.3170 remains relevant in resistance
  • Current range: 1.3070 to 1.3170

Further levels in both directions:

  • Below: 1.3070 and 1.2910 and 1.2831
  • Above: 1.3170, 1.3258, 1.3362 and 1.3460

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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