Pound is bound to rise

OANDA:GBPUSD   British Pound / U.S. Dollar
What do we know about GBP/USD? During the last week it survived three disappointments – services, construction and manufacturing PMIs came out below expectations.

However, it’s important to know – the pair lost only about 100 pips during that period. And we need to take into consideration that USD was quite strong for the whole week. So, the pair moves say that investors are in no rush to get rid of the pound, as they trust hawkish Carny. And it means that the very first argument in favor of GBP will trigger a broad based rally.

Non-Farm Payrolls scheduled for release on Friday may become such a driver. We already know the markets are overheated by the recent Trump’s tweets. Better than expected numbers are priced in. Besides, average hourly earnings will stay in focus, as the recent FOMC minutes showed some members were in doubt about the further progress on inflation .

If the number of new jobs and average hourly earnings in Non-Farm Payrolls come out below expectations, it may become a trigger to sell USD. In this case, GBP/USD may reach 1.3030 and target 1.31.
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