GBPUSD: GBP to USD Forecast Ahead of Brexit Day and NFP

Summary:

The GBPUSD will have a busy day today. Here are the key expectations ahead of the important Brexit meeting and US nonfarm payroll numbers.

The GBP to USD (GBPUSD) is wavering today ahead of the important nonfarm payroll numbers from the United States and the vital decision on Brexit. It is trading at 1.3447, which is lower than yesterday’s high of 1.3500.

The biggest mover of the GBPUSD today will be the latest updates about Brexit. That’s because, on Wednesday, Michel Barnier, the chief EU negotiator said that the next 36 hours would be crucial. If his sentiment remains, it means that we will know whether there’s a deal or not.

Ideally, most traders believe that there will be a deal at the end of the day. For one, the GBP to USD pair has risen by more than 6% in the past three months. Therefore, if there are strong differences between the EU and the UK, there is a possibility that a sharp reversal will happen.

The other major catalyst for the GBPUSD will be the US nonfarm employment numbers that will come out at 13:30 GMT. In general, analysts believe that the data will show that the US economy added fewer jobs in November than in the previous month. They also believe that wage growth, participation rate, and the unemployment rate will show a slight improvement.

If the numbers come in line with analysts’ projections, there will be no major reaction on the GBP to USD. However, if the numbers crash the estimates, we could see a slight reversal on the pair.

GBPUSD technical outlook

On the four-hour chart, we see that the GBPUSD has been rising recently. This upward trend has been supported by the ascending trendline. It has also formed an ascending channel that is shown in green. At the present price, the pair is slightly below the upper side of this channel. It is also above the 25-day moving average and the cloud of the Ichimoku kinko hyo.

Therefore, while the pair will possibly remain above the current price, there is also a possibility of it falling as bears attempt to retest the lower side of the channel.