Jan 6 (Reuters) – GBP/USD firmed on Friday, erasing earlier losses following data in the monthly U.S. jobs report and ISM non-manufacturing PMI that indicated U.S. wage and economic growth was cooling, which may signal a less hawkish Fed path in early 2023 and lend support to a sterling recovery.
Cable’s recovery catapulted it off its pre-payrolls low of 1.1848 to 1.1948 afterward.
The payrolls report left U.S. interest rates lower across the curve, converging UK rates, which could stabilize GBP/USD as markets await more data.
Support by the lower 30-day Bolli at 1.1858, while bruised, is holding but weakness that produces a close within the daily cloud — 1.1899-1.1319 — would facilitate a test of the 50% Fib of 1.1150-1.2446 at 1.1798.
Below there GBP/USD bears would target the 100-DMA at 1.1668 and then the Nov. 10 low at 1.1358.
Sterling gains will be hard-fought, with the 200-DMA at 1.2019 and multiple highs ahead of 1.21 providing resistance.
Traders will focus on U.S. CPI data on Jan. 12 next, which could bolster bears if progress toward lower price growth falters.
(Paul Spirgel is a Reuters market analyst. The views expressed are his own)
This article originally appeared on reuters.com