GBPUSD falls back to a key support after the weak UK jobs data. What's next?

The USD remained mostly rangebound following the better than expected NFP report where hot wage growth figures triggered a slightly more hawkish repricing in interest rates expectations and sent Treasury yields higher.

That wasn’t enough to lift the greenback though and traders are now focusing on the next key events including the US-China trade talks, the US CPI and the FOMC decision. The US Dollar will need hawkish stuff to get a boost.

On the GBP side, the weak UK labour market report today triggered a more dovish repricing in interest rates expectations for the BoE with the market now seeing 48 bps of easing by year end compared to 38 bps before the jobs data.

On the daily chart, we can see that the price is now near the key support zone around the 1.3435 level. This is where we can expect the buyers to step in with a defined risk below the support to position for a rally into a new cycle high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the major upward trendline.

On the 4 hour chart, we can see more clearly the recent price action. We might have formed a range between the 1.3435 support and the 1.3600 resistance. Tomorrow, we have the US CPI report and the data will likely impact the USD performance greatly, so watch out for that.