GBP/USD stabilizing near 1.2160 ahead of UK data

The downside in the Sterling seems to have taken a breather so far, with GBP/USD finding some decent support in the mid-1.2100s.

GBP/USD looks to data, Payrolls

GBP stays under pressure nonetheless, as Brexit concerns have re-emerged in the last couple of weeks in response to votes of the House of Lords to amend the Brexit bill, which could derail in unexpected delays in the negotiations to leave the European Union. Despite these developments, UK’s PM Theresa May has reiterated her intentions to trigger Article 50 by end of month.

On the USD side, expectations of a Fed move next week remain on the rise. According to Reuters’s Fedwatch, the probability of a 25 bp rate hike on March 15 is at just below 90% based on Fed Funds futures prices, sustaining the upside sentiment around the buck.

Further pressure to GBP comes from the speculative community, with net shorts increasing to levels last seen in mid-December during the week ended on February 28 as per the latest CFTC report.

Later in the session, UK’s Industrial/Manufacturing Production and Trade Balance figures for the month of January are due along with Construction Output. In the US docket, February’s Non-farm Payrolls (190K exp.) will be the salient event.

GBP/USD levels to consider

As of writing the pair is losing 0.05% at 1.2159 facing the next support at 1.2138 (low Mar.8) followed by 1.2036 (low Jan.11) and then 1.1979 (2017 low Jan.16). On the flip side, a breakout of 1.2253 (high Mar.7) would aim for 1.2302 (high Mar.6) and finally 1.2369 (20-day sma).