GBP/USD hits 7-week lows and rebounds

On a volatile day, GBP/USD is trading around yesterday’s closing price around 1.2160 after bouncing from the lows amid a correction of the US dollar in the market. 

Earlier the pair attempted a bullish correction after falling during three days in a row but it reversed near 1.2200. Cable dropped quickly and bottomed at 1.2132, reaching a fresh 7-week low. From the low, it bounced back to the 1.2150/70 area as the US dollar index turned again to the downside, after being unable to hold above 102.00. 

NFP and UK data tomorrow, FOMC next week

Today’s US jobs market data did not impress like yesterday’s ADP private employment report. Initial jobless claims came in higher-than-expected at 243K above the 235K of market consensus. Still, claims hold near the lowest since 1973. 

Regarding data, investors are awaiting the US official employment report on Friday (a gain of 190K is expected in NFP) and are also getting ready for next week’s FOMC meeting. 

In the UK, on Friday important economic data will be released with the Consumer Inflation Expectations report, the trade balance and industrial production data.  

GBP/USD levels 

To the upside, resistance levels might be located at 1.2195/1.2200 (daily high/psychological), 1.2215 (Mar 08 high) and 1.2250/55 (Mar 07 high). On the flip side, support could be seen at 1.2130/35 (daily low), 1.2105 (Jan 10 low) and 1.2085.