GBPUSD Analysis: Is the Pound Headed For A Weekly Clean Sweep On The Dollar?

Summary:
• GBPUSD bulls are in control early Friday, and the pound could complete the first five-day winning streak since July 2023.

GBPUSD continues with its upsurge in early London trading session on Thursday, as weak dollar fundamentals provide upside propulsion. The pair traded at 1.2816 at 08.45 UTC, the highest level since early August 2023. Traders are waiting for fresh impetus from US Nonfarm Payrolls data scheduled for release later on Friday. There aren’t high-impact releases on the UK economic calendar, putting the goal in the dollar’s court.

The greenback has had a torrid week underpinned by successive misses on projected macroeconomic data. Furthermore, the much-awaited speech by Fed Chairman Jerome Powell did little more than confirm the market’s conviction regarding a likely June interest rate cut.  A win by the pound on Friday could mark the first five-day winning streak since early July 2023.

Bank of England is expected to announce its first interest rate cut of the year after the Fed. This puts the pound in a stronger position than the dollar in the medium term. Heading into the weekend, however, GBPUSD will be spurred by Thursday’s Initial Jobless Claims data and falling US Treasury yields, as the market waits for NFP release.

Dollar bulls were let down by the latest Initial Jobless Claims data, which registered at 217,000. While this figure met the market forecasts, it wasn’t enough to neutralize the other multiple lower-than-expected macroeconomic figures released during the rest of the trading week. In addition, US Treasuries have been falling steadily during the week, thus exerting more downward pressure. Yields on the benchmark 5-year and 10-year bonds have fallen to 4.0% , having lost 2 basis points as of this writing.

The US dollar will get a free hand in finding its stability on Friday, when three high-impact figures come out. These include the US Unemployment Rate, the Nonfarm Payrolls and Average Hourly Earnings data.

Technical analysis

GBPUSD has its pivot at 1.2765, with the bulls in control. The upside will continue if the buyers hold on to control above the pivot. That will enable them to break the 1.2830 resistance, setting them on course to test 1.2860. However, if the buyers lose control under 1.2765, the sellers could pull the GBPUSD currency pair to the 1.2740 support level. Extended control by the sellers will break the first support, thus invalidating the upside narrative and potentially reaching 1.2720.