GBP/USD fades NFP-led recovery, back to pre-release level

The GBP/USD pair stalled post-NFP recovery beyond 1.2500 psychological mark and now seems to be heading back towards the lower end of daily trading range.

Currently trading around 1.2480-85 band, the pair ran through fresh offers near 1.2520 level despite of underwhelming wage growth data from the US that negated stunning headline print, which reinforced the underlying strength of the US economy.

Even the disappointing release of US ISM non-manufacturing PMI failed to provide any respite and the pair extended its slide further below 100-day SMA support. In fact, ISM PMI slipped to 56.5 for January from previous month’s 57.2 and was lower than consensus estimates pointing to a reading of 57.0. 

The pair remained under selling pressure for the second consecutive day against the backdrop of disappointing release of UK services PMI, released earlier during the day, pointing to slowing economic momentum. 

As Valeria Bednarik, Chief Analyst at FXStreet notes, "BOE's lack of concerns over inflation, hurt sentiment towards the Pound, now seen increasingly bearish in term. Given that a rate hike in the UK has been wiped off the table, that the Brexit is just around the corner, and that all of a sudden, macroeconomic data began to disappoint, investors are increasingly bearish in the GBP/USD pair, with 73% of the traders polled betting on a decline by the end of April, with the pair then seen at 1.2145."