GBPUSD Analysis: The Cable Looks Shaky Around 1.2850

Summary:
• GBPUSD is looking for upside propulsion around 1.2850, but the absence of high-impact macroeconomic data could make it difficult.

GBPUSD seeks stability around 1.2850 at the opening of the European session on Monday, as the dollar remains buoyant courtesy of Friday’s Nonfarm Payrolls data. The US Nonfarm Payrolls data rose beyond the forecast 198,000 jobs in February, to 275,000.  However, the dollar’s gains were limited by a spike in the unemployment rate to 3.9%, marginally above the forecast 3.7%.  Furthermore, average hourly earnings rose by a lower-than-expected 0.1%, missing the expected 0.2%.

Last week saw the pound complete a consecutive five-day winning streak against the dollar, for the first time since June 2023. The absence on high-impact data from the US could put the buyers in control on Monday. Also, yields on US Treasuries could provide fuel for some gains. The five-year and ten-year treasury bonds have seen their yields fall to 4.0% as of this writing., denying the dollar critical support.

In the medium term, the GBPUSD trading pair will be supported by hawkish sentiment emanating from recent comments by UK Exchequer Chancellor Jeremy Hunt and BoE Governor Andrew Bailey. There is a general consensus in the market that UK interest rates cuts will come after the US cuts, and this will provide some upthrust to the pound. BoE member Catherine Pann will speak later at the closure of the London session, but her comments could have a spillover effect into the New York session.

That said, US CPI reading will come out on Tuesday, and this could see traders place safer bets on Monday, in anticipation of greater volatility in the next 24 hours.

Technical analysis

The GBPUSD currency pair will likely pivot at 1.2870, and the RSI is mixed, but leans marginally towards the buyers. If the buyers take control above 1.2870, they could push the pair to meet the first resistance at 1.2895. Continuation of bullish control at that point will break the resistance and aim for 1.2920. However, the sellers could take control if they keep the rate under 1.2870 for a long period. That could break the 1.2835 support and create a momentum towards 1.2815.