GBP/USD Facing Renewed Downward Pressure from ADP Jobs Report

Summary:

The GBP/USD is facing renewed downward pressure after the ADP Jobs report strengthened the greenback on Wednesday.

Ahead of Friday’s Non-farm Payrolls report, the GBP/USD is is under pressure after the stellar ADP Employment change data generated some intraday strength on the greenback.

Private-sector hiring rose from 340K to 568K in September, beating consensus estimates for an addition of 425K jobs. Apart from the expected strengthening of the greenback in response to the upbeat numbers, expectations that Friday’s NFP data will also surprise to the upside are boosting bets of the Federal Reserve’s tapering program to kick off this month.

The Pound continues to remain weak overall as the UK’s HGV driver shortage continues. On Tuesday, the army was called in to help with deliveries of fuel and critical supplies. The fuel crisis is in its third week as a shortage of HGV drivers continues to create supply chain issues in the UK.

The GBP/USD is down 0.44% as of writing.

GBP/USD Outlook

The latest leg down appears to be the 5th impulse wave in the 1-2-3-4-5 Elliot wave pattern. The completion of this move requires that bears break down 1.34134, 1.34497 and 1.33951. This would open the door for the price to aim for 1.32663 before the corrective waves come into play.

This outlook is negated if the 5th wave is truncated at any of the support levels mentioned. Ultimately, the bulls would seek a break of 1.36117, targeting 1.36771 and 1.37463 in the process. Additional targets to the north are seen at 1.38126 and 1.38616.