The GBPUSD currency pair took a bit of a tumble following the release of the Non-Farm Payrolls (NFP) on Friday. Initially expected to drop to 190K, the NFP soared past the previous figure to 339K, giving the US Dollar a much-needed boost.  

If the US ISM Services PMI expected today comes in as forecasted (0.4% higher than the previous), then the GBPUSD currency pair could be subjected to further downside possibilities. Furthermore, the UK CIPS Services PMI came in at 55.2 which is lower than the previous 55.9, providing additional support for a weaker GBP.  

However, the Bank of England has hinted at the possibility of further rate hikes to curb high inflation rates, which contradicts the US Fed’s possible ‘skip’. This could boost trader sentiment for the currency pair in the long run.  

Technical 

The Non-Farm Payrolls ended the GBP’s rally against the USD. This led to the price level closing below the 50-day moving average and lower demand for the currency pair. Strong economic data expected for the USD could give the bears the ideal conditions to move further away from the 1.24211 previous resistance towards the 1.23509 support, where lower levels may come into play.  

Whereas impending rate hikes in the UK could see the bulls find support at 1.24211 and edge the currency pair towards the 1.25396 resistance.    

Summary 

The Non-Farm Payroll release saw the US Dollar reach new heights and the GBPUSD tumble giving the bears the opportunity to drive the price level towards the 1.23509 support. However, if the Bank of England hikes interest rates against the US Fed’s skip, the bulls could find support at 1.24211 and edge the price level towards higher resistance levels in the long run.    

Sources: TradingView, Reuters