GBP/USD holds steady above 1.2800 mark, moves little post-US ADP
- GBP/USD quickly reversed an early dip to an intraday low level of 1.2770.
- Fears of a no-deal Brexit, a strong USD rebound capped any further gains.
- The latest US ADP report failed to provide any impetus ahead of ISM PMI.
The GBP/USD pair held steady above the 1.2800 round-figure mark and had a rather muted reaction to the release of the US ADP report.
The pair managed to reverse an early dip to the 1.2770 region and jumped to fresh session tops in the last hour. Bulls, however, seemed struggling to capitalize on the move and the uptick remained capped below the 1.2845-50 supply zone or weekly tops.
The upside seems limited
Persistent uncertainty over the UK-EU future trade relationship turned out to be one of the key factors that held investors from placing aggressive bullish bets. This coupled with a strong pickup in the US dollar demand further collaborated towards capping gains.
As investors digested the Fed's surprise move to cut interest rates by 50 bps on Tuesday, the greenback managed to stage a solid bounce from near two-month lows and seemed rather unaffected by the ongoing slump in the US Treasury bond yields.
The buck held on to its strong gains after the latest ADP report showed that the US private sector employers added 183K new jobs in February as compared to 170K expected. This was strong enough to offset a sharp downward revision of the previous month's reading to 209K as against 291K reported earlier.
Wednesday's US economic docket also highlights the release of ISM Non-Manufacturing PMI for February, which might further influence the USD price dynamics and produce some meaningful trading opportunities ahead of Friday's closely watched US monthly jobs report (NFP).
Technical levels to watch