- GBP / USD struggled to capitalize on the post-NFP rally to fresh three-week highs.
- The US economy added fewer jobs than expected, the unemployment rate fell to 5.2%.
- The COVID-19 problems extended some support to the safe-haven dollar and limited the upside.
The pair GBP/USD it stopped the post-NFP rally and quickly retraced around 40 pips from the three-week high, around the 1.3865 region touched in the last hour.
Following a brief consolidation during the first half of the trading action, the GBP / USD caught some fresh offers and built on the previous day’s bullish breakout momentum from the 1.3800 level. The US dollar remained depressed amid doubts about the recovery of the US labor market, which, in turn, pushed the pair higher for the third day in a row.
USD selling pressure accelerated following the release of the NFP report, which showed the economy added 235,000 new jobs in August compared to 750,000 anticipated. The disappointing headline figure, to some extent, was offset by an upward revision to the prior month’s reading of 105,000 from 943,000 originally reported.
Additional details showed that the unemployment rate fell to 5.2% from 5.4% in July, in line with market expectations. Additionally, the data for median hourly earnings were also better than the consensus estimates and indicated strong growth. However, the data could have forced investors to further dissolve expectations of an imminent cut announcement.
Meanwhile, softer incoming economic data from the US now appears to have raised concerns about the risks associated with the fast-spreading Delta variant of the coronavirus. This was evident from a modest pullback in US equity futures, which extended some support to the safe-haven dollar and limited the upside for the GBP / USD, at least for now.
Technical levels
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