GBP/USD remains bearish below 1.2000

• GBP/USD fell during the early American session in reaction to the US NFP report, which was upbeat.
• The US economy added 372,000 new jobs in June (268,000 expected) and the unemployment rate remained at 3.6%.
• The data reaffirmed bets on aggressive Fed rate hikes and continued to lend support to the dollar.

The pair GBP/USD struggled to capitalize on its intraday bounce from the 1.1920 area and attracted fresh selling in reaction to mostly upbeat US jobs data. The pair last traded around the 1.1985-1.1980 zone, down almost 0.35% during the early American session.

The dollar’s intraday retreat from two-decade highs was quickly seized upon after NFP data showed the US economy added 372,000 jobs in June. This figure was slightly lower than the previous month’s downwardly revised reading of 384,000, although it was well above the 268,000 forecast. In addition, the unemployment rate remained at 3.6%, as expected, and confirmed expectations of a more aggressive policy by the Federal Reserve.

Aside from this, the prevailing cautious mood in equity markets offered some support to the safe-haven dollar. That said, the weakness in US Treasury yields prevented dollar bulls from making further bets and offered some support to the GBP/USD pair, at least for now. However, the short-term bias remains in favor of bearish traders amid Brexit woes and expectations of a less aggressive Bank of England.

Investors remain concerned that the British government’s controversial Northern Ireland Protocol Bill could trigger a trade war with the European Union amid the cost of living crisis. Additionally, recession fears could force the Bank of England to take a gradual approach to raising interest rates and act as a headwind for the pound.

Technical levels