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GBP/USD – Pound Steady, Brexit Bill is Approved

Kenny Fisher

GBP/USD is showing limited movement in the Friday session. Currently, the pair is trading at 1.3056, down 0.07% on the day.

Brexit Bill Sails Through Parliament

Parliament has seen its share of dramatic votes over Brexit in recent months, as lawmakers have held up various versions of a Brexit withdrawal bill. On Thursday, however, there were no fireworks, as the Brexit bill was approved in parliament by a large majority – 330 in favor, with 221 votes against the bill. The UK is on its way to leaving the European Union on January 31st, but the 11-month transition period will be a major test for London and Brussels, which must hammer out a new trade deal. EU officials have said this timetable is too short, but Prime Minister Johnson insists that he will not extend the transition stage. If the sides are unable to agree on a timetable, tensions could rise and nervous investors could lose confidence in the pound.

All Eyes on U.S. Nonfarm Payrolls

Following a very strong ADP nonfarm payrolls report, investors are hopeful that the good news extends to the official nonfarm payrolls reports, which will be released later on Friday. The ADP report found that the economy created 202 thousand jobs, crushing the estimate of 160 thousand. This marked the highest level since April. This was followed by a strong unemployment claims release on Thursday, which dropped to 214 thousand, down from 221 thousand a week earlier.

Will the good news extend to the nonfarm payrolls report? Analysts are bracing for a drop to 150 thousand, down from 266 thousand a month earlier. Wage growth is expected to rise to 0.3%, up from 0.2% in November. We could see some movement from GBP/USD after the release of these key events.

Technical Analysis

The pound has posted slight losses over the past few days, but faces some support barriers close by. There is immediate support at 1.3050, followed by a major support level at 1.3000. Note that the 50-EMA line is just below, at 1.2998. On the upside, there is resistance at 1.3150. The next resistance line is at 1.3120.

GBP/USD 1-Day Chart

 

Pacific Currencies – Daily Summary

USD/CNY

After losing ground during the week, USD/CNY has taken a pause on Friday. Currently, the pair is trading at 6.9314, up 0.02% on the day. There are no Chinese events on the schedule.

AUD/USD

AUD/USD is currently trading at 0.6876, up 0.26% on the day. The pair has posted daily losses every day this week, but is in positive territory on Friday, after a strong consumer spending release. Retail sales impressed with a 0.9% gain in November, compared to 0.0% a month earlier. It marked the strongest gain since April 2017.

NZD/USD

NZD/USD is headed for a second straight weekly loss. The pair is trading at 0.6623, up 0.13% on the day. There are no New Zealand releases on the calendar.

This article was originally posted on FX Empire

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