The GBPUSD pair continued to range and consolidate between the 1.35 and 1.36 region as the market awaits further data and developments to determine the next direction in this pair. The dollar is clearly on the backfoot and the data later today would likely determine whether we go into the weekend with the same trend or a reversal.
GBPUSD in Consolidation
We had the services PMI data from the UK yesterday and it was fairly on expected lines. This has led to ranging and with the lack of push in any specific direction, the pair continues to consolidate. The theme over the last 24 hours has been one of weakness in the dollar but this has not yet been enough to push the pair through the top of the range as yet. There has not been much fundamental developments in the UK over the Brexit process and hence the pound remains steady at best.
The traders await the next push from somewhere which would help them to determine the next short term direction. That push is likely to come in later today as we have the NFP data scheduled to be released from the US just before the beginning of the US session. Some part of the market believes that the 3 rate hikes that is expected from the Fed is already priced in and hence, it would require a great effort from the bulls to turn around the negative sentiment that is being seen in the dollar.
We also have the non-manufacturing PMI data from the US and hence, it should be a day when the focus would be firmly on the dollar. If the employment data comes out better than expected, it would help the dollar to gain in strength and we should see the pound break through the support region at 1.35 and move lower over the course of the coming week.